The most exciting cryptocurrency product war in 2025, who can laugh to the end

# Written by: 0xResearcher  

Imagine holding the world’s most valuable digital asset—Bitcoin—in your hands, yet it sits like a gold bar locked in a safe, useless for anything other than appreciation. It feels like owning a Ferrari but only being able to drive it around a parking lot: thrilling yet frustrating.  

But this landscape is undergoing a complete transformation. In the third quarter of 2025, when we witnessed a project’s community sale achieve a 1,400% oversubscription, attracting 21,340 participants from 132 countries, this was more than just a successful fundraising event—it was a microcosm of the explosive growth of the entire Bitcoin DeFi ecosystem. The data paints an even clearer picture: the BTCFi market grew by over 22x in 2025, with its total value locked (TVL) surging by more than 2,000%. Behind these numbers lies the full awakening of a once-slumbering giant.  

From the phenomenal performance of Pump Fun to star projects like Linea, Monad, and Berachain announcing their Token Generation Event (TGE) plans, the entire crypto market has been energized like never before. And amid this wave, the most fascinating story is that Bitcoin has finally "learned" to engage in DeFi.  

For years, Bitcoin has been like the respected elder of the crypto world—everyone holds it in high regard, but it has always sat quietly in the corner observing, rarely joining the "games" of younger players. While Ethereum’s DeFi scene boomed with endless protocols emerging, Bitcoin remained aloof, clinging to its identity as "digital gold" and refusing to do anything else. But now, everything has changed. Technological breakthroughs have allowed Bitcoin to finally "step into the arena" of DeFi—and its entrance has been nothing short of a game-changer.  

## Staking Sector: A Dazzling Shift from "Idle Holding" to "Passive Earnings"  

The success of the Babylon protocol is nothing short of astonishing. Who could have predicted that during its October 2024 launch, 24,000 Bitcoins (approximately $1.5 billion) would flood into its staking pool in just 1 hour and 40 minutes? The first round of 1,000 Bitcoins was snapped up in a mere 74 minutes. The scene was reminiscent of a concert ticket rush—except this time, people were competing for a chance to invest in Bitcoin’s infrastructure.  

Babylon’s core innovation lies in enabling native Bitcoin staking, meaning Bitcoin holders can finally earn returns without surrendering control of their assets. In simple terms, it allows your Bitcoin to "work and earn money" while remaining secure. The significance of this technological breakthrough is comparable to installing a perpetual motion machine on a gold bar: it preserves value *and* generates growth.  

Hot on Babylon’s heels, Core DAO launched its own Bitcoin staking solution, integrating Bitcoin’s security into its network via the Satoshi Plus consensus mechanism. Its strategy was even more aggressive: directly airdropping CORE tokens to stakers, attracting a flood of Bitcoin miners. This "mining + staking" dual-income model gave miners—who previously relied solely on mining for revenue—a new source of income.  

Even more intriguing is the flourishing of the Liquid Staking Token (LST) sector. This space is like Bitcoin DeFi’s "armory," stocked with every tool imaginable. Lombard’s LBTC reached $1 billion in TVL in just 92 days, becoming the first Bitcoin LST recognized by blue-chip protocols such as Aave, Spark, and EigenLayer—equivalent to obtaining a "passport" to the DeFi world.  

pumpBTC took a different approach, focusing on cross-chain liquidity solutions that let users utilize staked Bitcoin across multiple blockchains. Lorenzo Protocol aims to build a unified liquidity layer for the Bitcoin ecosystem, positioning itself as the central hub for all Bitcoin DeFi activities. Allo Protocol harbors even greater ambition: to create a decentralized Bitcoin asset management platform, allowing professional investors to manage Bitcoin portfolios for retail users.  

These protocols are all trying to solve one core problem: how to let Bitcoin "earn passive income" while maintaining liquidity. It’s like equipping a gold bar with wheels and an engine—enabling it to move *and* propel itself forward.  

## Infrastructure War: Equipping Bitcoin with an "Intelligent Brain"  

If staking taught Bitcoin to "earn money," then innovations in infrastructure are equipping it with an "intelligent brain." The intensity of this technological race is comparable to the legendary "browser wars" of the early internet era.  

BOB (Build on Bitcoin) is perhaps one of the most ambitious projects in this space. Using BitVM technology, it achieved what seemed impossible: seamlessly combining Bitcoin’s security with Ethereum’s DeFi capabilities. BOB’s solution acts like a "translator" for Bitcoin, allowing it to understand and execute complex smart contracts while preserving its original security features. To date, BOB has attracted over 30,000 Bitcoins in bridged funds, establishing itself as a key gateway to Bitcoin DeFi.  

Arch Labs took a more direct route. It is developing ArchVM, aiming to implement Turing-complete smart contract capabilities directly on Bitcoin’s base layer. This is like performing a "brain transplant" on Bitcoin—transforming it from a simple value storage tool into an intelligent platform capable of running complex applications. While the technical challenges are enormous, success would completely redefine Bitcoin’s role.  

Hemi Network’s solution is even more ingenious. It embeds Bitcoin nodes directly into the Ethereum Virtual Machine (EVM), creating a hybrid architecture. This design lets developers leverage both Bitcoin’s security and Ethereum’s programmability—like building a bridge connecting two worlds. Hemi calls itself "the largest programmable layer on Bitcoin," and while the claim may sound boastful, it has indeed achieved significant technical breakthroughs.  

Amid this infrastructure war, Lombard chose a more pragmatic yet equally innovative path. As a protocol focused on unlocking Bitcoin’s liquidity, Lombard uses its LBTC token to strike an "optimal balance" for Bitcoin holders: earning staking returns while retaining the freedom to use their assets across major DeFi protocols. The success of this strategy is evident in its community sale data: originally aiming to raise $6.75 million, it ultimately received $94.7 million in subscription requests—an astonishing 1,400% oversubscription. With 21,340 participants from 132 countries, the event felt like a global Bitcoin community gathering.  

Interestingly, Lombard’s success lies not only in its fundraising numbers but also in its precise strategic positioning. Instead of reinventing the wheel, it focused on being a "connector"—enabling Bitcoin to seamlessly integrate into the existing DeFi ecosystem. LBTC’s recognition by blue-chip protocols like Aave, Spark, and EigenLayer is equivalent to securing a "VIP pass" to the DeFi world.  

Stacks took a different tack, leveraging its unique "Proof of Transfer" consensus mechanism to "borrow" Bitcoin’s security for its smart contract platform. DeFi protocols on Stacks, such as ALEX and Arkadiko, have already accumulated a sizeable user base, proving the viability of this technical path. Recently, Stacks also launched sBTC, aiming to deliver a better cross-chain Bitcoin experience while maintaining decentralization.  

Then there’s Rootstock (RSK), a project that has been operational for years, providing smart contract functionality to Bitcoin via sidechain technology. Though not the newest player, RSK is like a "veteran" in the Bitcoin DeFi space, offering valuable lessons for later entrants. It recently unveiled a new scaling solution, seeking to boost transaction efficiency while preserving compatibility with Bitcoin’s mainnet.  

These infrastructure projects are like adding "plugins" and "extensions" to Bitcoin, allowing this "elder" to finally thrive in the DeFi landscape. Each project has its own technical path and strengths, but they all share a common goal: unlocking Bitcoin’s immense potential in DeFi. And judging by the frenzy of Lombard’s community sale, the market is clearly eager for such innovation.  

When investors from 132 countries collectively say "yes" to a BTCFi project, this is no longer a regional triviality—it is a global referendum on Bitcoin’s future. From the auroras of Northern Europe to the coconut groves of the equator, from Wall Street cafes to late-night offices in Tokyo, investors worldwide are watching the same development: this silent giant is finally ready to speak.  

The shift in Wall Street’s attitude is particularly intriguing. As traditional financial giants begin to seriously consider Bitcoin allocations, they are not looking for simple "buy-and-hold" strategies—they want professional financial products that generate returns, offer liquidity, and meet regulatory requirements. When giants like BlackRock and Fidelity started focusing on Bitcoin ETFs, that was just the first step; next, they will likely seek more complex Bitcoin financial products. This is the value of BTCFi infrastructure: it upgrades "digital gold" into "interest-bearing gold."  

Retail investors’ behavior has also shifted in interesting ways. They have long grown tired of being limited to "catching the next wave" in secondary markets and now want to stand on the same starting line as institutional investors. This demand has driven the development of fairer, more transparent token distribution mechanisms—and explains the frenzy around community sales. When ordinary investors realize they can participate in the early stages of infrastructure development, their enthusiasm is ignited.  

Yet what we see now is likely just the tip of the iceberg. Compared to the maturity of Ethereum’s DeFi ecosystem, Bitcoin DeFi is still like a toddler taking its first steps. The room for innovation in staking mechanisms, liquidity management, yield optimization, and risk control is unimaginably vast. And as regulatory frameworks become clearer, compliant BTCFi products will gain even more room to grow.  

Most interestingly, the competitive landscape of this sector is far from settled—it is like the American Wild West during the gold rush: full of opportunities, but also risks. Technical paths are still being explored, business models are unproven, and user habits are still being cultivated. This uncertainty is both a challenge and an opportunity, giving new entrants a chance to overtake incumbents.  

Projects that can offer full-stack solutions, build strong community foundations, and gain recognition from mainstream protocols are likely to become the biggest winners in this "gold rush." The key lies in striking a balance between technological innovation, user experience, security, and compliance.  

## Conclusion  

Looking ahead, we may well witness Bitcoin evolve from "digital gold" into the most critical underlying asset in a multi-chain DeFi ecosystem. Infrastructure will become increasingly sophisticated, interoperability between protocols will improve, and a complete Bitcoin financial ecosystem will eventually take shape. When that day comes, BTCFi products may be as widely accepted by the mainstream market as traditional financial products are today.  

When 21,340 people from 132 countries cast their votes of confidence in a single project, this is more than just an investment decision—it is a collective bet on the future of Bitcoin finance. And based on the current momentum, this bet is likely to yield substantial returns. After all, when the world’s most valuable digital asset finally learns to "work and earn money" *and* is equipped with an "intelligent brain," who wouldn’t want to be part of that story?  

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