The wave of Bitcoin financialization is quietly sweeping across the globe. While its status as a store of value is as solid as a rock, the latent potential of decentralized finance (BTCFi) is like an undeveloped mine waiting for both technological and market activation. Bitlayer acts as a refined catalyst, igniting the demand for asset returns among BTC holders and the enthusiasm of traditional financial institutions, composing a new chapter for the Web3 ecosystem.
The potential of BTCFi stems from Bitcoin's vast capital base and the growing demand for financialization. By August 2025, global institutions held 22% of BTC, including ETF products from BlackRock and Franklin Templeton, while ordinary holders are eager to unlock idle assets through DeFi tools.
Bitlayer seized this opportunity, with its Layer 2 solution increasing transaction throughput from 7 TPS to thousands of TPS. By supporting developers in building BTC payment dApps through EVM compatibility, it meets the dual expectations of compliance from institutions and returns from retail investors. Its YBTC (1:1 pegged to BTC) partnered with Kamino Finance to offer an annual yield of 5-8%, attracting over 1.5 million users.
Bitlayer's strategy is also reflected in its multi-chain ecosystem expansion. The BitVM Bridge, as a trust-minimized BTC bridging solution, eliminates traditional custody risks and has supported over $200 million in TVL. The xCreatorPad platform, through the Create2Earn campaign in August 2025, distributed 100K BTR rewards to incentivize developers to submit BTCFi projects, further promoting ecosystem prosperity. However, the development of BTCFi faces challenges, including the need to resolve institutional regulatory compliance and delays related to main chain dependencies.
In the future, if Bitlayer optimizes cross-chain efficiency and deepens institutional collaboration, it may lead the BTCFi market. This catalyst injects new life into Bitcoin's financialization. Each of its reactions releases the potential of Web3, and we should witness its sweeping momentum together.#Bitlayer @BitlayerLabs
