Bitcoin-Fi: Current Challenges

BTC holders face significant liquidity limitations. Unlike the more mature Ethereum ecosystem, the Bitcoin ecosystem lacks robust savings, lending, and trading infrastructure, hindering optimal capital utilization. Simply holding BTC for appreciation limits asset flexibility, preventing users from accessing liquidity while maintaining BTC exposure.Current challenges for BTC holders seeking additional yield include:

• Complex Cross-Chain Processes: Transferring assets to other blockchains or exchanges requires cumbersome and often inefficient procedures.

• Lack of Smart Contracts on Bitcoin: The absence of smart contract functionality on the Bitcoin blockchain severely limits the development of native yield-generating applications.

• Limited Flexible Liquidity Solutions: The BTC ecosystem currently lacks flexible liquidity solutions that cater to diverse user needs.

Ineffective Yield Solutions

Existing BTC yield products suffer from several shortcomings:

• Non-Native Yield Distribution: Many projects offer yields in their own tokens, forcing users to sacrifice liquidity for non-BTC returns.

• Low Native APY: After accounting for tokenized yields, few BitcoinFi projects offer native BTC APYs exceeding 3%.

• Long Lock-up Periods: Staking solutions often involve extended lock-up periods, reducing capital efficiency and increasing the risk of potential losses.

Security Risks

Current BitcoinFi projects face numerous security challenges:

• Lack of Oversight and Regulation: Many projects lack credible backing or third-party oversight, increasing investor risk.

• Vulnerable Cross-Chain Bridges: Cross-chain bridges are frequent targets for hacker attacks, leading to potential asset losses.

• Insufficient Custody and Risk Management: A lack of professional asset custody and robust risk management systems exposes users to significant security vulnerabilities.

To address these challenges in the BitcoinFi landscape, BitFi offers a secure and reliable native BTC yield solution through its innovative CeDeFi approach.