Boost Your DeFi Strategy with Bitcoin Smart Contracts on Portal

Decentralized finance, or DeFi, has the potential to revolutionize the way we use cryptocurrencies and digital assets.

However, despite its early success, DeFi has faced significant setbacks due to a lack of security, true decentralization, and other core values. These challenges have led to a loss of confidence in decentralized markets and a missed opportunity to tap into DeFi’s full potential.

Fortunately, the Taproot upgrade for the Bitcoin network offers a solution by enhancing its Hashed TimeLock Contracts (HTLCs) with Schnorr signatures. This makes it faster, more efficient, and more private.

By building DeFi on top of the secure and decentralized Bitcoin network, Portal aims to create a robust, sustainable market with more resilient features for users.

• Taproot Upgrade Enhances DeFi with Bitcoin Smart Contracts on Portal

Since its inception, decentralized finance, commonly referred to as DeFi, has empowered people with various smart use cases for cryptocurrencies and digital assets. DeFi has emerged as a crucial branch in the industry and paved the way for innovations like GameFi and SocialFi.

At its peak in 2020, DeFi significantly contributed to the massive adoption of crypto. However, due to numerous market challenges and the novelty of this module, DeFi has faced significant setbacks, especially in 2022. As a result, users are losing confidence and interest in decentralized markets, and much of DeFi’s true potential remains untapped.

• Key Challenges of Present-Day DeFi

The reasons for this failure are clear: lack of security, true decentralization, trustlessness, transparency, P2P markets, and anonymity.

The idea of decentralization is based on these principles, and the absence of any undesirable or unforeseen circumstances. However, present-day DeFi fails to support the market with these pillars, which allows a narrow gap for malicious actors to pull scams or hack networks and bridges.

People turning to DeFi for these failures have also not found a safe haven in CeFi platforms. The major CeFi failures of 2022 — Celsius, Voyager, 3AC, FTX, etc. — have proved that DeFi is the final resort for the crypto space. However, for DeFi to thrive in the coming years, some crucial steps must be taken to reconsider and rebuild the market with a resilient, safer, and truly decentralized network like Bitcoin.

• DeFi will Thrive on the Bitcoin Network!

The blockchain space has advanced significantly. However, nothing compares to the Bitcoin network when it comes to adhering to all the core values of decentralization, including robust security, true decentralization, trustlessness, transparency, open markets, and privacy.

The Bitcoin network uses something called Hashed TimeLock Contract (HTLC) to perform transactions between two parties over different channels. It requires no third party or intermediaries; HTLCs carry out the transfers with cryptographic proof while eliminating trust from the entire process.

The upcoming Bitcoin soft fork, the Taproot upgrade, is further aimed at making Bitcoin unstoppable with the goal of bringing greater innovation on top of it. Taproot is intended to add more power to Bitcoin’s HTLCs, making the network faster, more efficient, and more private.

The upgrade introduces something called Schnorr signatures that enable multiple and complex signatures/transactions to be batched and verified together, bringing incredible speed to the network. This batching power will also prevent congestion or logging while hosting smart contracts.

If used carefully, DeFi on top of Bitcoin can establish a robust, secure, and sustainable market with more resilient features. Therefore, Portal is building DeFi on top of the Bitcoin network, allowing users to leverage its unbreachable security while enjoying a true decentralized P2P market.

• Portal: Bring the best out of Layer 1 & Layer 2

Portal is a financial market built on top of Bitcoin, fostering a decentralized P2P and trust-minimized market with a non-custodial wallet. Built with Fabric, a layer 2 decentralized protocol, Portal eliminates the need for any third party or intermediaries from the space, such as crypto bridges and wrapped tokens, as they bring centralization and vulnerability to assets. Portal introduces atomic swap transactions that allow users to perform cross-chain transactions using the Portal wallet without the need for any third party.

All of these solutions, combined with the enhanced security and decentralized features of Bitcoin, can make DeFi unbreakable and unstoppable. Portal leverages all the benefits of Bitcoin to establish an open, decentralized market, empower people, and mark the rebirth of DeFi.

About Portal

The Portal project is a peer-to-peer, trust-minimized application running on top of Bitcoin. It allows users to access a decentralized network right from their wallets. In addition, users can now manage multiple blockchain assets and financial services from within their wallets. The project is backed by Coinbase Ventures, ArringtonXRP Capital, Republic Capital, B21 Capital, and several other big names in the crypto and DeFi space.

With Portal, DeFi becomes a service that anyone can provide, maintaining anonymity for a competitive fee within open, transparent markets, with a security model as robust as Bitcoin mining. And because it is built on Fabric, it comes with privacy, speed, and security.

A Financial Internet Built on Bitcoin ✈️