Cross-chain technologies such as Zeus Network are changing the landscape of how Bitcoin holders can utilize their coins without transferring them. Users can now utilize their BTC within the DeFi ecosystem without bridges or wrapping them, enhancing the capabilities and earning prowess of BTC held on the native chain.
Bitcoin (BTC) remains the most widespread and valuable cryptocurrency in the decentralized space today – 15 years after its inception. Despite its prominent growth and adoption, its functionality and utility have been extremely limited, with most investors choosing to hold their coins. To this point, Bitcoin (the crypto and blockchain) has lagged relative to smart contract-based and decentralized finance (DeFi) platforms in functionality, with blockchains such as Ethereum and Solana setting the tone in the DeFi space.
Bitcoin’s meteoric price rise, its global acceptance as a store of value, and its adoption by institutions and countries are the major reasons the coin has offered users limited opportunities. The native chain has seen little innovation, apart from the recent developments of L1 options such as Ordinals, Runes, BitVM, sidechains and more recently, the growth of Bitcoin L2 solutions.
The blockchain trilemma, a phenomenon that states blockchains can only prioritize two of the following features – security, decentralization, or scalability – could be the biggest hindrance to the utility of the blockchain. Bitcoin prioritizes security and decentralization over scalability, which stifles the programmability of the native chain. In addition, Bitcoin transaction fees are high, anywhere from $5 to over $100 when the network is congested, and the transactions are slow compared to ERC-20, BEP-20, or Solana projects.
Developers rarely build complex decentralized applications (DApps) on the native Bitcoin chain. While programmability, high fees and the ‘digital gold’ status of Bitcoin contribute to this lack of complex utility, the pioneer blockchain faces a much bigger issue – interoperability.
Bitcoin’s Lack Of Interoperability Hinders Innovation
Bitcoin developers have been working on expanding the native chain’s capabilities, either through Layer 2 solutions or sidechains to give more utility to holders of BTC. Despite the recent increase in the number of Bitcoin Layer 2s and variants, applications on Bitcoins cannot interact and communicate with one another (or other blockchains) seamlessly.
Swapping one variant of BTC for another ‘wrapped’ version on a different chain is a complex process, requiring the user to complete multiple operations and transactions via bridges. For instance, a user wishing to use wBTC (a wrapped version of BTC on Ethereum) on a DApp in Avalanche will need to first transfer the wBTC to Avalanche blockchain, swap the wBTC to BTC.b (tokens stored on AVAX), to be able to use them. These processes are more complex when the user needs to use BTC on an L1 chain like Solana. The processes become longer, meaning the user will spend more on gas fees and jump several hoops to successfully get exposure to the new form of BTC.
A lack of interoperability – seamless interoperability – has been a major problem for the growth in innovation for Bitcoin’s native chain. The fragmented nature of Bitcoin-based assets has slowed down the pace of growth for BTC in DeFi, and solving this issue is critical for the industry to reach its full potential.
Bridges have proved inefficient due to the hacks and thefts, sidechains have their problems, and, as explained, L2s suffer from interoperability issues. A new solution for Bitcoin is needed to unlock the billions of dollars currently sitting idle in users’ wallets. The solution has to quench the growing demand for the productivity of BTC, maintain the decentralized principles of Bitcoin, and retain the security properties that the native chain offers.
Cross-Chain Technology As A Solution To Interoperability Issues
Zeus Network is a cross-chain platform that aims to unlock this potential for Bitcoin, the asset, and bring revolutionary innovations to the native chain. The protocol enables seamless communication between the Bitcoin chain and Solana, leveraging the benefits of both blockchains to transform DeFi, as we know it. Zeus Network combines the speed, low transaction costs and efficiency of Solana with Bitcoin’s highly secure network, allowing users to utilize BTC’s liquidity without transferring the asset from Bitcoin’s native chain.
Simply, the core developers provide a permissionless communication layer that allows BTC holders to use their BTC assets on Solana’s ecosystem while tapping into Bitcoin’s security. This is achieved through a sophisticated system where transactions are proposed and stored on Solana, signatures are aggregated on the Zeus layer, and then these signed transactions are broadcast to the Bitcoin blockchain.
The platform is composed of two major components – the on-chain Zeus Program Library (ZPL), a set of SVM programs and client SDK and the off-chain Zeus Layer, a peer-to-peer network composed of Zeus Nodes. By leveraging the ZPL platform, assets from Bitcoin can be changed into ZPL assets, which can then be used seamlessly on Solana, unlocking access to the vibrant Solana ecosystem.
A Better Future For Bitcoin?
For the past decade and a half, Bitcoin has solidified its place as ‘digital gold’. This has been a key point for the acceptance of the cryptocurrency by the SEC, institutions, and countries but the community is yearning for more utility and earning opportunities. With bridges, sidechains and Layer 2 solutions having their limitations, cross-chain technologies such as Zeus Network could prove a suitable solution to unite the fragmented DeFi space for Bitcoin.
Cross-chain technologies could benefit the Bitcoin ecosystem by breeding new innovations, unlocking liquidity, and promoting the overall growth of the crypto ecosystem. While these solutions are still in their nascent stage, the future seems bright, and only time will tell how well they help in integrating Bitcoin into the wider DeFi ecosystem.
