2020 was unequivocally the year of decentralized finance. Driven by surging interest and striking breakthroughs, DeFi protocols accelerated financial innovation while reshaping the blockchain landscape. Buoyed by innovations in cross-chain asset gateways and DeFi protocols, Ethereum has attracted a substantial amount of Bitcoin (BTC) assets, thus cutting into Bitcoin’s on-chain transfers.
Moving forward, this trend will pose severe challenges for Bitcoin’s network security, especially as BTC continues to phase out block rewards, leaving miners increasingly unable to generate income. Prior to the explosion of DeFi, BTC supporters were confident in their ability to generate income through the platform’s transaction fees — yet this appears to no longer be the case. Moving forward, I’d like to explore the future of BTC and its implications for the blockchain sector.
As blockchain adoption enters a new phase, decentralized finance is facilitating an irreversible shift away…