Dorsey, the co-founder and Chief Executive Officer (CEO) of Square, announced that Square will be launching an initiative to build Decentralized Finance (DeFi) and Bitcoin services.
DeFi Platform on Bitcoin
Jack Dorsey has announced that Square will be creating a ‘new business’ that is completely in the open. They will be focusing on Decentralized Finance (DeFi) and Bitcoin.
The new initiative will have an open roadmap, open development and will be open source. The news was announced in a series of Tweets made by Dorsey, the founder of both Twitter and Square.
Dorsey said that Square had “some ideas around the initial platform primitives we want to build.”
DeFi refers to financial products or services built on a blockchain that cuts out the traditional middleman. Traditional financial services such as lending, trading, insurance and savings can be offered through a series of protocols.
These protocols are both efficient and permissionless. This is due to the underlying distributed ledger and cryptographic technology.
The move seeks to push the limits of innovation by bringing DeFi to Bitcoin. DeFi first started on the Ethereum platform and is now available on various chains that can support smart contracts. cdn.embedly.com/widgets/media.html?type=text%2Fhtml&key=c4e54deccf4d4ec997a64902e9a30300&schema=twitter&url=https%3A//twitter.com/jack/status/1415765941904941061&image=https%3A//abs.twimg.com/errors/logo46x38.png
The unnamed new business will be a platform for developers to create financial services. Mike Brock will be leading and building the team and he has named the founding team members.
This initiative came not long after Square announced that it will be building a hardware wallet to make Bitcoin custody more mainstream.
What to Expect from this Project?
Dorsey announced that the primary focus of this initiative will be on Bitcoin. Bitcoin, the first cryptocurrency introduced to the world, is the world’s most known crypto asset. However, it lacks the versatility of Ethereum because it cannot support smart contracts.
Smart contract functions enable DeFi protocols to be built on a blockchain. DeFi is a growing niche within the crypto space attracting many developers and consumers to the DeFi market.
Bitcoin’s narrative has been as the ultimate store of value. It serves its purpose without the need to incorporate smart contracts into its protocol. Square and Dorsey and looking to take this to the next level.
However, as DeFi grows, other crypto assets are seen as better investments because it can participate in DeFi for returns. Wrapped Bitcoin (WBTC), an ERC-20 token backed by Bitcoin on a 1:1 ratio was introduced to circumvent this hurdle. This allows bitcoin holders to participate in the DeFi market.
Nevertheless, WBTC is still a bridge to the Ethereum platform. This initiative by Square in having DeFi on the Bitcoin blockchain adds more value by having additional functionality.
DeFi market is an attractive industry as it allows various financial products and services to be built on it. Other chains such as Binance Smart Chain have grown significantly because they offer DeFi capability.
If Bitcoin is a platform where financial products and services can be built on it, it improves access to financial services and it also lives up to one of its narratives. This is banking the unbanked. It will make the leading cryptocurrency a more stable asset as more wealth flows into its ecosystem to participate in DeFi.
Creating a Massive Platform
Jack Dorsey being the technology entrepreneur that co-founded Twitter and Square is a visionary. The aspiration of creating a fully decentralized platform focussed on Bitcoin commendable.
There are many challenges to overcome, mainly the costs of transaction and the speed of transaction.
The next few months will be interesting as the project’s roadmap and framework develops. A new Twitter and Github account will be created to provide updates on this project.
In short, if this project successfully takes off, Bitcoin will have a prominent role to play in shaping the future of finance.
Source : bsc.news
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