In light of recent vulnerabilities in the decentralized finance (DeFi) sector, Bitcoin (BTC) maximalist and MicroStrategy CEO Michael Saylor feels that Bitcoin and Lightning Network can save the DeFi market. increase.
The DeFi sector is facing a difficult time as there are two huge protocols, Terra and Celsius, each facing serious problems within a month. And in a recent tweet, Sailor suggested that Bitcoin and Lightning could help stabilize the industry.
According to Saylor, Bitcoin provides “a sound ethical, economic and technical foundation for DeFi.” He further stated that he would use the Lightning protocol and BTC tokens to build the next generation of DeFi.
— Michael Saylor ⚡️ (@saylor) June 14, 2022
Saylor responded to Bloomberg’s talk on Tuesday, highlighting many important concerns in the DeFi space. Mahin Gupta, founder of the digital asset storage platform Liminal, told Bloomberg:
“What’s happening in Celsius will have a serious impact on the industry. It’s an insignificant player, and its obvious failure will have a spillover effect.”
Celsius Networks closed withdrawals and other transactions on the platform just one month after the spectacular collapse of the Terra blockchain. As a result, investors earned about 20% annually. The collapse of Terra, which was caused when Stablecoin lost a one-to-one peg against the US dollar, and the suspension of Celsius’ withdrawal, added to the loss of cryptocurrencies.
As a result, MicroStrategy CEO has been very enthusiastic about Lightning Network, Bitcoin’s layer 2 scaling solution. according to For Saylor, Bitcoin is the future of money, and the Lightning protocol supports transaction scalability. He added:
“Fast payments and transactions require a base layer that is ethically sound, economically sound, and technically sound. That’s Bitcoin. But then billions of The transaction runs on Layer 2 like Lightning. “
To date, DeFi applications on the Bitcoin network have not gained the same level of popularity as other blockchains such as Ethereum and Solana. Still, some people who have studied DeFi believe that it can be implemented in a sustainable way with Lightning Network. say it “There are benefits to stablecoin and fully secured loans to your BTC.”
Related:Bitcoin Lightning Network capacity will be charged at 4,000 BTC
According to Ignite’s Aliasgar Merchant, DeFi is “hard” and everyone is doing everything they can to survive the crypto winter. He highlighted recent events at Terra and Celius as evidence of the failure of DeFi, which aims to be the core of Web3. According to Merchant, the two most important aspects of developing a robust DeFi system are interoperability and scalability. “With a solid foundation, we can focus more on niche protocols to meet the needs of DeFi,” he added.