Cardano Launched Cardinal: Bitcoin DeFi on Cardano

It is the launch of Cardinal, the first Bitcoin DeFi protocol built for the Cardano network.

The announcement has already sent ripples through the crypto markets. Cardano’s native token, ADA, surged over 5% in a single day. As investors expressed optimism about the new possibilities.

How does Cardinal Work?

Cardinal leverages advanced cryptographic technology to bridge Bitcoin and Cardano. This approach is both secure and user-friendly. For the first time, users can directly use their Bitcoin unspent transaction outputs (UTXOs). For example, for lending, staking, and borrowing on Cardano. All possible without relying on centralized custodians or traditional bridges. This is a game-changer for Bitcoin holders who have long sought ways to earn yield on their assets. This is without exposing them to third-party risk.

At the heart of Cardinal is MuSig2. This is a multi-signature technology that allows multiple parties to securely authorize transactions together. This setup ensures that Bitcoin remains locked on its original chain while its value is mirrored on Cardano. It can be used in DeFi applications. The protocol wraps each Bitcoin UTXO into a 1:1 pegged asset on Cardano. This means that users can redeem their Bitcoin at any time through a secure, fraud-proof process. So, their assets are never rehypothecated, meaning they are not reused or lent out without their knowledge.

Cardinal also supports Bitcoin Ordinals, a recent trend that lets users inscribe unique digital assets. Such as NFTs, onto Bitcoin’s blockchain. These Ordinals can now be used as collateral within Cardano’s DeFi ecosystem. This will unlock new financial opportunities for collectors and investors alike. The protocol is designed to be compatible with other major blockchains. This includes Ethereum and Solana, further expanding its potential reach.

More About Cardano

The Cardano Foundation announced the launch of the Cardano Blockchain Ecosystem Budget, managed by Intersect, which is now open for community governance.

This budget is a key part of Cardano’s 2025 roadmap, with roughly 275 million ADA allocated for ecosystem initiatives. DReps and ADA holders are encouraged to review the proposal, understand its impact, and cast their votes to help shape Cardano’s future.

Disclaimer

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