Cardano (ADA) has launched Cardinal, a groundbreaking protocol that enables Bitcoin (BTC) to be used in its decentralized finance (DeFi) ecosystem without the need for central custodians.
Presented by Cardano founder Charles Hoskinson and Input Output HK, Cardinal marks the first Bitcoin-backed DeFi solution on Cardano blockchain.
The protocol uses wrapped UTXO technology and the MuSig2 multi-signature scheme, ensuring secure, decentralized transactions while allowing users to redeem original BTC or native tokens at any time.
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BitVMX enables verifiable off-chain execution, while Cardano smart contracts handle on-chain validation. The system is also compatible with Ethereum, Solana, and Avalanche networks.
Cardinal’s integration allows Bitcoin to be used across Cardano-based DeFi platforms like MinswapDEX, SundaeSwap, and Fluid Tokens, for lending, trading, or collateral, without losing self-custody.
Cardano’s technical director, Roman Beleren, called it the start of a new era for Bitcoin in DeFi, with plans to expand into wallet integration, zero-knowledge proofs, and enhanced liquidity.
Following the launch, ADA’s trading volume surged nearly 50% to $800 million in 24 hours. The price of the network’s native coin ADA also responded positively, jumping by more than 5.3% intraday and reaching the $0.71 level on Tuesday.
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People Also Ask:
Yes, Cardano does have a growing DeFi (Decentralized Finance) ecosystem, though it is still relatively small compared to more established networks like Ethereum or BNB Chain.
Cardano utilizes a unique Proof-of-Stake (PoS) protocol called Ouroboros, which delegates validation to over 3,000 stake pools. However, Cardano was created by Input Output Global (IOG), and the founding entities still hold a significant amount of ADA and influence over protocol development.
Cardano DeFi is built on a UTXO model with a strong emphasis on peer-reviewed research, formal verification, and scalability, while Ethereum uses an account-based model and has broader adoption and liquidity.
Cardano’s focus on scalability (Hydra), low fees, formal verification, and environmentally friendly proof-of-stake consensus makes it an attractive platform for DeFi development.
