BitGo Integrates Stacks, the Bitcoin Smart Contract Layer, to Enhance DeFi Functionality

This integration represents a further step forward towards the institutional adoption of Bitcoin native decentralized finance (DeFi)

Digital asset services leader BitGo has recently announced support for the Stacks blockchain, which aims to enhance the functionality of Bitcoin.

This integration marks a step towards the institutional adoption of Bitcoin native decentralized finance (DeFi), catering to the growing demand for safer and more profitable solutions.

Here's a closer look at the details:

Bitcoin news: BitGo integrates Stacks

As mentioned earlier, the increasing institutional demand for Bitcoin has led BitGo to integrate Stacks, a layer-2 (L2) solution on the Bitcoin network.

This integration will allow users of the platform to earn rewards in Bitcoin through a process called "stacking."

Users holding Stacks (STX) will be able to generate a native yield in BTC directly in their wallet, without lending or exposing their assets to additional risks.

Highlighting the significance of this integration, Kyle Ellicott, head of ecosystem investments at Stacks, stated:

"Allowing institutions to earn a native Bitcoin yield with their STX is a huge step forward for Bitcoin. This is part of BitGo's goal to put institutional capital to work with DeFi and staking. Making Bitcoin a productive asset is crucial for the long-term success of Bitcoin as a pillar for a decentralized economy."

A new way to interact with DeFi protocols

The integration with Stacks provides a new avenue for Bitcoin holders to engage with DeFi protocols, a domain that many Bitcoiners have been hesitant to enter due to the risks associated with smart contracts and proof-of-stake (PoS) protocols.

Stacks, known as the Bitcoin smart contract layer, ranks fifth among Bitcoin layer-2 solutions with over $95 million in total value locked (TVL).

This translates to a market share of 7.9% among all Bitcoin layer-2 solutions, according to DefiLlama.

As part of this new partnership, BitGo will also support the new Stacks token standard, sBTC, becoming a "Signer" on the network to contribute to block production and consensus.

This will occur upon the full launch of sBTC, a non-custodial asset backed by Bitcoin 1:1 and designed to enhance the programmability of the Bitcoin network.

As a Signer, BitGo will facilitate deposits and withdrawals of sBTC and the conversion of BTC into sBTC between the L1 and L2 layers.

Other signers of sBTC include Figment, Blockdaemon, Near Foundation, Luganodes and Chorus One.

The goal of sBTC is to lower the barrier for developers to build decentralized finance applications on the Bitcoin network, opening up new possibilities for the broader DeFi landscape and the enhancement of the Bitcoin ecosystem.

Bitcoin reaches new highs above $66,000

Bitcoin (BTC) crossed the $66,000 threshold in early Asian trading on Friday, continuing its bull run after a volatile few weeks.

At the time of writing, the price of Bitcoin has slightly retreated, trading at $65,456.03 with a gain of 3.8% over the past 24 hours, according to data from Coingecko.

This surge follows a period of uncertainty in July, when BTC briefly dropped to $53,500 amid concerns over the exchange Mt. Gox creditor reimbursements.

The recovery is part of a broader bull trend in the cryptocurrency market, with Ethereum recording an increase of 3.2%, reaching $3,470.

A key factor contributing to the recent positive momentum is the complete sell-off of Bitcoin holdings by wallets linked to the German state of Saxony.

According to Eugene Cheung, VP and Head of Institutions at Bybit, the conclusion of BTC sales by the German government provided short-term relief and stimulated renewed demand in the market.

Cheung notes that a large portion of the Bitcoin supply is still held at a cost lower than the current price, which bodes well for the market's health.

However, the impending distribution of Mt. Gox coins introduces an element of caution, although many believe this selling pressure is already factored into the price.

Additionally, the cryptocurrency market received a boost from the pro-Bitcoin stance of Republican presidential candidate Donald Trump.

In an unexpected move, Trump announced crypto-friendly senator J.D. Vance as his vice presidential running mate in a post on Truth Social.

This news quickly trended on social media, adding to the positive outlook for the crypto community.

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