Welcome to the BitcoinOS Overview. 

Every month, we’re diving into BitcoinOS, Bitcoin DeFi on Sovryn and ecosystem developments to get up to speed on its latest updates, metrics, insights and more – all in one place.

⚡What happened: BitcoinOS launched the Grail testnet bridge, allowing users to move bitcoin from Bitcoin Testnet 3 to various EVM-based testnets.

⚡Why does it matter: For the first time, users can directly interact with BitcoinOS's trustless Bitcoin scaling technology, moving testnet bitcoin across multiple chains, while still maintaining custody. Unlike traditional Bitcoin bridges that rely on third parties, Grail is designed to be a trustless scaling solution to extend Bitcoin’s utility beyond a store of value. This can allow users to engage with the broader DeFi ecosystem.

The Grail bridge uses a different approach to Bitcoin bridging by maintaining Bitcoin's security through mathematical verification instead of relying on trusted third parties. This means only one honest node is needed to keep the system secure, reducing the vulnerabilities that have affected other bridges in the past.

By posting all transaction states back to the Bitcoin source chain, the bridge keeps the network secure even as assets move to more programmable environments on Ethereum based chains. The bridge uses zero-knowledge proofs for security and to verify that bitcoin is properly locked on the Bitcoin chain before minting equivalent tokens on destination chains. This helps solve the challenge of using bitcoin’s value in other blockchain ecosystems while maintaining its security. 

For users and developers, this bridge can open a path to use bitcoin in EVM-based DeFi ecosystems, which host about 52% of all decentralized finance activity. Currently, the bridge supports one way transfers with future plans to integrate two way bridging for its mainnet, which is launching in a few weeks. This can help make bitcoin both a store of value and an active form of capital in the expanding digital economy.

⚡The big picture:  BitcoinOS's Grail bridge can help solve the challenge between Bitcoin's strong security and limited programmability. The bridge’s potential ability to connect Bitcoin with EVM chains can open up the possibilities for BTCfi. This can unlock liquidity and DeFi utility for the largest crypto asset, which is currently at a market cap of $1.6 trillion as of March 10.

Currently, most of the bitcoin held is sitting idle in cold wallets with little to no exposure for real world utility. BTCfi can also give users the ability to put their “bitcoin to work” for more productive uses like yield generation, trading and real world transactions. BitcoinOS’s recent integration with Arbitrum can also facilitate this on one of the largest Ethereum L2s by TVL at $12.1 billion. 

This bitcoin bridge can transform bitcoin from being akin to digital gold into a vehicle for various use cases to be used more like decentralized money. 

Interested in learning more? 

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This information is for entertainment purposes only. It should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research.