Jack Dorsey Targets Bitcoin Network With DeFi
Square CEO Jack Dorsey has stated that the company is creating a new division that will focus on creating decentralized finance services (DeFi) that use Bitcoin. In essence, Jack Dorsey is expected to target the Bitcoin network with DeFi.
Dorsey made the announcement via Twitter, revealing that Square’s new division will develop an “open platform for developers with the sole objective of facilitating the creation of non-custodial financial services. Without permits and decentralized. Our main target is Bitcoin.
The new platform will offer decentralized financial services without custody and without permits. The main cryptocurrency with which it will operate will be Bitcoin and will work on LDK (Lightning Development Kit). Regarding his name, Dorsey’s tweet assures that it will be TBD. This could mean To Be Determined, or its name could simply be the letters TBD.
The platform according to Jack Dorsey will join the applications Seller, Cash App and Tidal
As Dorsey himself explained in a post on Twitter, the platform will join the existing applications Seller, Cash App and Tidal. The first are two applications created by Square for processing digital and mobile payments. While Tidal is a recent acquisition of the company and focuses on streaming music content.
Dorsey appointed engineer Mike Brock as head of the division. Who previously led a development team that was working on integrating Bitcoin features into Cash App in mid-2018. Brock has experience in open source projects from his work with open source enterprise solutions provider, Red Hat Inc.
On the other hand, the businessman commented that both the code and the roadmap and the development of this project will be open. Something similar happens with the hardware wallet that Dorsey recently announced.
A company of the stature of Square working to create easy-to-use DeFi services on Bitcoin could increase adoption and provide greater competition to Ethereum-based DeFi protocols.
Currently, the Bitcoin network does not have the capacity to execute smart contracts. Making it difficult to compete with Ethereum’s native DeFi protocols and its interoperable “Money Legos.” Decentralized finance in Bitcoin relies on additional infrastructures such as bridges and sidechains to enable smart contract functions.
New Announcements Coming Soon to Square’s New DeFi Platform
Dorsey, assured that Square will not direct the new platform, but that its intervention will be limited only to contributing funds. Currently, the Bitcoin network does not support smart contract capabilities. Making it difficult to compete with Ethereum-based DeFi and other DeFi-enabled blockchain cryptocurrencies.
According to data from Defi Llama, Ethereum dominates the top 100 DeFi platforms in terms of blocked value (TVL), with Aave topping the list with $ 10.1 billion in TVL. Binance Smart Chain, a close competitor to the Ethereum blockchain, also competes with platforms like PancakeSwap with $ 3.76 billion in TVL and Venus with $ 1.49 billion in TVL.
Square generated $ 4.5 billion in Bitcoin revenue last year on its Cash app. Jack Dorsey’s company is already behind Square Crypto, which is dedicated to building and funding open source Bitcoin projects that support BTC payments. Now Dorsey has announced this new initiative to create an open development platform that paves the way for decentralized financial services (DeFi) on Bitcoin.