How does bitSmiley, which raised tens of millions of dollars in funding, accelerate the deployment of stablecoins on Bitcoin?
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How does bitSmiley, which raised tens of millions of dollars in funding, accelerate the deployment of stablecoins on Bitcoin?
Mainstream capital is rushing into BTCFi, and DeFi infrastructure providers like bitSmiley are scrambling to establish their presence.
Navigating Web3 tides with focused insightsBy Haotian
Seeing @bitsmiley_labs secure another $10M in funding to accelerate its vision of launching bitUSD, a new stablecoin on Bitcoin, I’m reminded of how this project—affectionately known as "Smiley"—has captured attention. So, what exactly is this BTCFi stablecoin project aiming to achieve? What’s its core technical framework? And why is the BTCFi market receiving such widespread enthusiasm? Here are my thoughts:
1) The Ethereum DeFi ecosystem originated with MakerDAO's DAI algorithmic stablecoin and gained momentum through Compound's lending platform and governance incentives, sparking the "DeFi Summer." To seize first-mover advantage in the BTCFi space, bitSmiley #SMILE integrates foundational DeFi models like MakerDAO (DAI) and Compound (Lending), launching three key components:
1. bitUSD: An over-collateralized stablecoin protocol modeled after DAI. Users can deposit Bitcoin into the bitSmiley Treasury to mint bitUSD. Built on the bitRC20 standard for high transparency, it partners with ZetaChain for a native cross-chain bridge, enabling circulation across all chains.
2. bitLending: A native trustless lending protocol using peer-to-peer atomic swap technology for order matching. It also introduces an insurance system to improve upon the shortcomings of traditional liquidation processes in lending.
3. Credit Default Swaps (CDS): An innovative derivatives protocol integrating NFT-fragmented CDS positions, utilizing aggregated bidding to enhance market efficiency and fairness.
2) Full evaluation requires hands-on experience with the product. Focusing on two core technical aspects:
1. Native cross-chain integration with @zetablockchain: ZetaChain is a POS blockchain built on Cosmos SDK and Tendermint’s PBFT consensus engine. It embeds specific chains into a unified omnichain environment, enabling interoperability operations. Since Bitcoin lacks smart contract functionality, ZetaChain deploys light nodes and uses ECDSA-based multi-party signatures. By securely tracking and managing UTXOs on Bitcoin, it enables safe cross-chain transactions.
Beyond this, as an omnichain smart contract platform, once the cross-chain challenge between Bitcoin and ZetaChain is resolved, it theoretically enables transparent management of assets across all chains via its universal connectivity.
2. The bitRC20 standard—why does it resemble the BRC20 token standard? Precisely. bitUSD adopts the BRC20 model of issuing assets directly on the Bitcoin mainnet. When users wish to over-collateralize BTC, they first bridge assets through the official bitSmiley bridge. After the bitSmiley Layer 2 chain confirms and validates the collateral, it sends a signal to the Bitcoin mainnet to mint bitUSD.
Traditional BRC20 tokens require pre-defined total supply deployment, but bitRC20 adds Mint and Burn functions tailored for stablecoins, allowing dynamic supply adjustments. This is where indexers come into play—the adapted inscription method proves more practical and empowering for real-world applications.
That said.
Ultimately, it’s clear why mainstream capital is rushing into BTCFi, and why infrastructure providers like bitSmiley are racing to position themselves.
On one hand, players are eyeing the massive potential for asset growth in BTCFi. With only $1.6 billion currently locked in the Bitcoin network—just 0.14% of Bitcoin’s total market cap—the room for expansion is enormous. Compared to ETH or Solana, BTCFi has 50–100x headroom in asset lock-up rates. Moreover, capital isn’t limited to on-chain sources; significant off-chain demand exists, including from BTC and ETH ETF funds.
On the other hand, I believe that securing strategic positioning in core Bitcoin-based applications—stablecoins, lending, derivatives—will have ripple effects across the entire omnichain ecosystem. Such projects can revitalize DeFi paradigms and user engagement, catalyzing renewed innovation throughout the multichain landscape.
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Haotian | CryptoInsight
