DeFi
BitGo Integrates Stacks for Bitcoin Rewards, Following Institutional Demand for BTC — TradingView News
Digital asset services provider BitGo has launched support for the Stacks blockchain to enhance Bitcoin’s functionality, the latest sign of institutional adoption of Bitcoin’s native decentralized finance.
BitGo’s integration of Layer 2 (L2) Bitcoin network stacks will allow platform users to earn Bitcoin BTC/USD rewards through “stacking,” a process that allows STX 
According to Kyle Ellicott, Head of Investor Ecosystem at Stacks, this new partnership underscores the continued adoption of Bitcoin by institutions. He writes:
“Enabling institutions to earn native Bitcoin yield with their STX is an important step for Bitcoin as part of Bitgo’s goal of putting institutional capital to work for DeFi and staking. Making Bitcoin a productive asset is crucial for Bitcoin to succeed in the long term as the rails of a decentralized economy.”
The integration could offer Bitcoin holders a new way to interact with decentralized finance protocols, especially for Bitcoiners who have shied away from DeFi protocols due to the risks associated with smart contracts and proof-of-stake protocols.
Stacks is recognized as Bitcoin’s smart contract layer and ranks fifth among Bitcoin’s Layer 2 solutions. According to DefiLlama, its total value locked is over $95 million, representing a 7.9% market share among all Bitcoin Layer 2 solutions.
Related: Binance-Backed pSTAKE Finance Launches Liquid Bitcoin Staking Solution
BitGo to support sBTC as a network signer
As part of this new partnership, BitGo will support Stacks’ new token standard, sBTC, and become a “signer” on the network to contribute to block production and consensus.
This will happen after the full release of sBTC, a non-custodial asset, backed 1:1 by Bitcoin, designed to improve the programmability of the world’s leading blockchain network. As a signatory, BitGo will also help facilitate sBTC deposits and withdrawals as well as the conversion of BTC to sBTC on both Layer 1 and Layer 2.
Other sBTC signers include Figment, Blockdaemon, Near Foundation, Luganodes, and Chorus One.
Stacks’ sBTC aims to make it easier for developers to build DeFi applications on the Bitcoin network.
Stacks has yet to activate its Nakamoto release, paving the way for sBTC and 100% Bitcoin finality. The release was launched on April 22, and activation is expected to happen on August 28, according to Stacks’ roadmap.
Related: Stacks Active Accounts Hit Record High Amid Growing Interest in Bitcoin DeFi
Nakamoto to usher in a ‘renaissance’ for Bitcoin DeFi
The partnership marks a new development for Bitcoin DeFi, or BTCFi, an emerging developer movement that aims to add more utility to the Bitcoin network.
Notably, the full activation of Stacks’ Nakamoto release will usher in a renaissance for Bitcoin DeFi, according to Stacks’ Ellicott, who wrote:
“Stacks will inherit 100% of Bitcoin’s security budget, making transactions as irreversible as Bitcoin and enabling sBTC to facilitate the decentralized movement of BTC to L2. This release will mark the beginning of a new renaissance of new Bitcoin builders, technical upgrades, and growth in user interest, offering a promising glimpse into the future of Bitcoin DeFi.”
Bitcoin DeFi is introducing new products to the crypto space, including the first-ever Bitcoin-backed synthetic dollar with yield-generating capabilities. Hermetica’s Bitcoin-based synthetic dollar, USDh, debuted in June, with a 25% annual percentage yield, derived from futures funding rates.
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