How Cardano Is Powering Bitcoin DeFi With Zero-Knowledge Proofs

Episode Transcript

Speaker 1 (00:00):
The Bitcoin conference is happening right now and we are
seeing glimpses of Bitcoin DeFi happening at the moment. I'm
going to go through the details of how this is possible,
the teams that are building on bitcoin and Kadano to
make this all possible. We're going to go through the details.
Let's get into it. Hey everyone, I'm Peter buy If
it's the first time here at make sure you hit

(00:20):
that thumbs uplight subscribe on your way in I talk
all things Bitcoin Cadano. I've got a lot to cover here,
but check this out, guys. This is what's happening at
the moment. This is the IOG. This is the input
output the company that created the Cadano blockchain, but they
have now integrated in a ways that Bitcoin users can

(00:40):
unlock the value there and start participating in DeFi directly
from the bitcoin ecosystem. So this is a way that
Bitcoin users that are just holding it could possibly stake
or do swaps or whatever it is, They can now
easily participate in DeFi because of these extra layers that

(01:00):
the Kadana ecosystem now have. Now, this has been going
on for a little while and the multiple different projects
are working on this at the moment, but check this out.
This is Sheldon Hunt here with Michael Sailor and they
had a really long conversation around all of this and
what is possible. Sheldon here is part of the team
that is making the Sundial protocol. This is an L two.
This is a layer two that sits on top of

(01:22):
the Caadana ecosystem that can interact with Bitcoin using zero
knowledge proofs. This it gets quite technical. I won't go
into the details, but you can check out all the
details about Sundial on their website here, so you can
understand how it all works. But integrating this in allows
you to unlock the liquidity there that's in the Bitcoin

(01:43):
ecosystem and let's it interact with the Caddana ecosystem. There's
multiple different projects that are working on it, but Sundal
is definitely one of them. But at the Bitcoin conference,
the Input Output team ran a Bitcoin DeFi lunch and
learn and they were showcasing how this is all possible.
And this is their demo video here, So let me
zoom in here and play this for you. There's no audio,

(02:06):
well it's actually really bad audio, but I'll go through
exactly what's happening in this video here. So first off,
this is Lace wallet. This is the wallet that input
output have created and it is now bitcoin enabled, so
it's Bitcoin enabled and Kardana enabled. So let me just
play this one here. So they're in their DAP browser
and they're navigating over to the mintswap decks, which is

(02:28):
the biggest decentralized exchange on the Candona ecosystem, and they
will just need to now authorize this particular DAP here,
and you can see in the window that this particular
person is swapping zero point zero zero two nine btc
for a ten thousand min token. So let me just
go through that and play this. So they're authorizing the

(02:50):
DAP within the wallet and now that's authorized, so now
they can click on the trade confirm the transaction. They
normally would have to type in a confirmation password. There
it is, and that's all done. So that is how
easy it will be for bitcoin users to enter into
the Kadana ecosystem simply by interacting with the Lace wallets.

(03:12):
So really really cool stuff. Now Bitcoin users mostly are
simply holders, they're looking for a price appreciation over time,
but now having these extra opportunities to actually trade ordinals,
rooms and other things like that. The players that are
out there looking for additional gains they can do so,
and this opens up a whole bunch of DeFi opportunities

(03:36):
and liquidity for bitcoin holders and also the Kadana ecosystem,
so really exciting stuff. Now. This is all made possible
because the two ecosystems are very similar in how they
are built. This is a demonstration here from the tx
pipe team of the code from either side. They're building

(03:56):
a toolkit here that allows you to develop on Kadana
and Bitcoin, and if you have a look at the
code here, you don't need to understand it, but it's
almost identical in how it's written. And this is because
Bitcoin and Kadana use the same model in terms of
how transactions are structured. It's called the Unspent Transaction output

(04:17):
UTX so for sure. And because the two ecosystems are
so similar, it allows the interoperability between them seamlessly. So
it's really easy for any Kadana developer to start building
on Bitcoin because it is so similar in the way
that you need to think about how to actually structure
and write smart contracts for the ecosystem there now because

(04:38):
Kadana developers have had years of developing smart contracts now
on the Caddana ecosystem, having these interoperability bridges over to
Bitcoin allows them to now program and build smart contracts
in DeFi for the Bitcoin ecosystem. So this is amazing
stuff and it's really exciting. Now the Input Output team
have put out a white paper about this and how

(04:59):
it all actually works. They call this Cardinal. It's a
Bitcoin Caadana UTXO wrapping protocol for ordinals and beyond. Now,
this hasn't been officially released to everyone, well it might
actually be, but they're gating it with an email list,
so you need to sign up here. You can get
to this page here at lace dot io slash Bitcoin.

(05:20):
I'll put the links down below for you guys so
you can actually get to it. But this all here
is their landing page for it. You just need to
sign up for the mailing list on this page and
you'll up get the updates in regards to this brand
new protocol that they're launching for the DeFi ecosystem for Bitcoin.
If you haven't tried out Lace yet, you can get
to it lace dot io. It's a very user friendly

(05:41):
wallet for the Kardana and Bitcoin ecosystem. Actually, the bitcoin
side of things was just released de beta testers such
as myself, but you'll be able to access the bitcoin
side of things very soon. So a couple of people
were interested in that. I did an update about that
in one of my previous videos saying, hey, you can
actually integrate with a big coin here, but they weren't
able to because they weren't in the beta release of it. Anyway,

(06:05):
I've got some video tatorils about this as well. So
if you want to learn more about the Lace wallet,
you can get to my courses at Learncardona dot o.
If search for courses there, you'll be able to go
the course page and you'll be able to find the
Lace wallet stuff. Now, like I said a little bit earlier,
there are some other teams that are working on this
interoperability layer between the two ecosystems. This team here at

(06:27):
bitcoin os they've been ramping up their marketing about this
because they're getting further and further down the path of
launching their product here too. And this will allow any
user to seamlessly use their bitcoin over to the Cadona
ecosystem and they claim that you don't need to wrap
your assets. They use zero knowledge proof to be able

(06:50):
to interact with the Bitcoin ecosystem and prove that that
bitcoin's being locked up so you can then use it
on the Condona ecosystem. It's a little bit confusing on
how that one works, and I still haven't gone to
the final details of it, and I haven't seen their
white paper yet, but they did a demo of this
a little while back and it seems pretty interesting. So
watch out for this team here. They're definitely doing some

(07:12):
cool stuff with Bitcoin DeFi two. Now, there are some
Condina projects that are way ahead of the curve and
have been building on both ecosystems. Fluid Tokens is one
of them. It's a borrowing lending protocol using exotic assets
such as NFTs. But they have really cool defive players
on the Codina ecosystem and they've been launching that all

(07:32):
on the Bitcoin ecosystem as well. So let me just
load up their website and you can actually see what
it all looks like. So this is their Bitcoin side
of things. Let me load up their apps so you
can actually see how it all looks. So here we go.
So this is their multi network platform, and for those
Bitcoin holders out there, you're probably more interested in seeing
exactly what their Bitcoin integration looks like. And here you

(07:54):
can see various staking vaults for ordinals, but they also
have swaps so you can have your BTC there and
swap it for meme coins such as Dog. They also
have their lending protocol on here as well. They have
air drop platform and also a dashboard where you can
manage all that stuff, connect up your BTC wallets, whatever

(08:15):
it might be. So Fluid Tokens is definitely one team
leading the charge in their DeFi ecosystem, and it just
makes things so much easier when you have the depth
of experience from the Condona ecosystem and developing there and
then translating over to the Bitcoin side of things. Now,
the other teams that are working on all of this

(08:35):
as well, we have the Tokyo guys. They set up
a booth at one of the side events at Bitcoin
at the Bitcoin Conference. You can check them out if
you are there as well. So they're at Inscribing Vegas,
the Ordinals event, but their wallet is fully integrated with
the Bitcoin and Condona ecosystem. They're all ready to go

(08:55):
for this brand new era of DeFi. We also have
other teams that have done that both. We've got begin
Wallet which is integrated in with both the chains as well,
and we also have Vesper, which has a brilliant onboarding experience.
You'll be up and running with their wallet within seconds.
You don't need to sell up a seed phrase. You
can recover it from it later on. But Vesper is

(09:18):
another team that is doing the Bitcoin and Candana side
of things too, so they've got a lot of partnerships,
including with Fluid Tokens, who have led the charge there
with the Bitcoin development. So really exciting stuff and can't
wait to see what all these teams have got coming up,
especially with this wrapping layer that IOG are bringing out
to the ecosystem. So lots of stuff here to be

(09:40):
excited about. If you are a Bitcoin holder, if you
are a bitcoin user, this opens up a lot of
opportunities for you guys. And if you like that kind
of stuff, if you want to make some bank on
the bitcoin ecosystem, make sure you hit that thumbs up
like subscribe notification bell I'll keep you up to date
with everything that's happening between bitcoin Candano, this Bitcoin defive
thing is ramping up and pretty excited about it. Also,

(10:04):
want to do a big shout out to all the
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Absolutely love the support and there is plenty of new

(10:26):
members content coming up for you guys too. All right,
and with that, I'll see you all in the next video.