How to dive into the DeFi world of BTC

The Decentralized Finance (DeFi) and Non-fungible Tokens (NFTs) ecosystem surrounding Bitcoin has been growing in recent months. Loud DefiLlama There are now over $1.2 billion in DeFi applications that are built directly on the blockchain of the largest cryptocurrency. In addition, the recent success of Bitcoin Ordinals (NFTs on Bitcoin) has shown that there is growing interest in the crypto market in making tokens tradable directly on the Bitcoin blockchain. After the CryptoPunks on Ethereum, Bitcoin “Runestones” are now the second largest NFT collection in the entire crypto market – a fabulous rise. The market capitalization of the entire Runestone NFT collection is currently just under $500 million.

With the introduction of the upcoming activation of the Runes token standards On the day of the Bitcoin Halving, the Bitcoin Blockchain is about to experience another transformation. In the future, Runes will make it possible to trade altcoins in addition to NFTs even more easily than before directly on the Bitcoin blockchain. On X and YouTube The developments surrounding the new token standard are currently attracting a lot of attention. Many expect the Runes sector to grow extremely rapidly in the next few months. But how can you be part of this ecosystem yourself and how can ordinals, BRC-20 tokens and soon also runes be traded on the Bitcoin blockchain?

To dive into the DeFi world of Bitcoin, you need a compatible wallet. The Xverse Wallet is one of many options that you can use to enter the DeFi world of Bitcoin. The wallet was specifically developed to interact with Ordinals, BRC-20 tokens and, after the halving, also with the new Runes token standard.

And this is how you can use the wallet.

Step 1: Wallet download and setup

Start by removing the Xverse Wallet from the official website Download and install on your device. It is available for both Android and iOS devices and offers an extension for Chrome browsers. If you don’t have a wallet yet, set up a new one. If you already have a wallet, you can restore it by entering your seed phrase or connect your hardware wallet directly to Xverse. However, for optimal protection, it is recommended to set up a new Xverse wallet and initially only deposit a small amount of Bitcoins, which you can then use to experiment with the DeFi ecosystem.

Step 2: Wallet to back up

After installation, it is crucial to secure your wallet. The Xverse Wallet generates a seed phrase that you must keep safe. This phrase is the key to your assets and will be required in case you need to restore access to your wallet.

Step 3: Fill Xverse Wallet with Bitcoin

To interact with DeFi applications, you must first transfer Bitcoin to your wallet. Use the wallet’s “Receive” function to generate a deposit address and transfer the desired amount of BTC.

Step 4: Use DeFi apps on Bitcoin

After setting up your Xverse Wallet, you will have a wide range of applications available in the Bitcoin ecosystem. The wallet serves as a central interface through which you can use both NFTs and decentralized applications on the Bitcoin blockchain.

1. Use browser tab: Open the Xverse Wallet and navigate to the browser tab. Here you can seamlessly navigate to various decentralized applications operating on the Bitcoin blockchain.
2. Explore Applications: In the Xverse Wallet user interface you will find access to a variety of Bitcoin applications. These include NFT marketplaces, DeFi protocols, GameFi Applications and much more. Each of these applications expands the functionality of Bitcoin and offers you new ways to use and invest your cryptocurrencies.

Step 5: Trade Ordinals, BRC-20s and Runes

Now that you are familiar with the navigation and basic functions of the Xverse Wallet, you can begin to actively participate in trading digital assets such as Ordinals, BRC-20s and soon Runes.

Trading ordinals:

• Platforms like MagicEden to use: You can directly access NFT marketplaces that support Ordinals via the browser function in the Xverse Wallet. These offer a variety of unique digital assets stored on the Bitcoin blockchain.

Trade BRC-20s:

• DEX like UniSat use: For trading BRC-20 tokens, the Xverse Wallet offers a direct connection to corresponding decentralized exchanges. These platforms allow the purchase, sale and exchange of BRC-20s.

Trading Runes (after Halving):

• Preparation for new marketplaces: It is expected that after the activation of the Runes token standard, platforms such as MagicEden or UniSat will enable trading of these new fungible tokens. Through the Xverse Wallet you will be able to receive, send and trade these tokens.

Conclusion

The DeFi ecosystem on Bitcoin is still in its infancy compared to blockchain networks like Ethereum or Solana. Bitcoin was never originally designed to host such DeFi applications and as a result the application possibilities for Bitcoin are more limited and the infrastructure for DeFi is less mature. Investments in new tokens such as Ordinals, BRC-20s and the soon-to-be-available Runes therefore currently involve a very high risk. The long-term utility and value of these tokens is still uncertain, and it remains to be seen how they will establish themselves within the market. Despite these uncertainties, getting early into this ever-faster growing ecosystem could pay off in the long run, as the DeFi ecosystem is expected to continue to grow in the coming years.

Disclaimer: The article merely reflects the opinion of the author and is therefore intended to be used only for informational purposes. This is in no way a buy or sell recommendation.