- Summary:
- ZeusNode, the core infrastructure built on the Solana Virtual Machine (SVM), enables BTC holders to engage with Solana’s DeFi ecosystem.
Investors understand that it makes little sense to leave their Bitcoin assets sitting idly in their digital wallets when they could exchange those tokens for Ethereum or some other cryptocurrency and put them to work in DeFi.
Yet leave them idle they do, for there’s simply no other option to do so if you want to be a part of Bitcoin’s ongoing story.
That explains the enormous effort to bring more utility to Bitcoin over the last three or four years, with recent innovations achieving some dramatic breakthroughs in terms of giving investors a way to earn yield on their BTC holdings.
The earliest efforts to put Bitcoin to work involved bridging the tokens to Ethereum, and for a while there was a lot of talk about possibilities of “wrapped” assets such as wBTC, which is an ERC-20 token that can be swapped on a 1:1 basis with traditional BTC. With wBTC, it suddenly became possible to keep holding Bitcoin while simultaneously engaging in DeFi.
With wBTC, investors have found a way to put their Bitcoin to use in protocols for lending, staking, providing liquidity and other yield-generating methods.
However, very few have done this because bridging Bitcoin to Ethereum in this way introduces some serious problems for decentralization. To mint wBTC, investors are required to send their original BTC to a custodian – a company called BitGo – which is a centralized organization that’s tasked with protecting all of the BTC held in reserve. Because wBTC is issued on a 1:1 basis for every BTC deposited, the custodian must hold 1 BTC for every wBTC token it gives out to Ethereum investors. When they do this, investors are trusting that the custodian in question won’t be hacked or misbehave, like other centralized crypto companies have done in the past.
A second issue is that wBTC is an ERC-20 token, and it relies on Ethereum smart contracts to govern the above yield-generating strategies. Smart contracts are vulnerable to all kinds of bugs and exploits, which means investors must be willing to accept the very real risk of losing access to their BTC.
Unlocking Bitcoin on DeFi
Fortunately, recent developments mean investors no longer have to trust custodians when they use BTC in DeFi, and furthermore, they don’t even have to use the Ethereum network either. Instead, they can now bring their Bitcoin to the Solana blockchain, and do it in a way that doesn’t involve bridging tokens in the traditional sense. Once there, investors can put their BTC to work in Solana’s nascent DeFi ecosystem, which is smaller than Ethereum’s, but just as profitable and less susceptible to hacks.
The key to this is a new protocol called Zeus Network, which is uniquely able to bring Bitcoin and all of its strengths to the Solana network without any of the risks associated with wBTC, giving investors a chance to earn substantial yield. It has created a pluggable architecture that facilitates the direct utilization of BTC in various DeFi applications, maintaining the security of the Bitcoin blockchain while reducing the complexity involved. It simplifies the headaches involved in generating Bitcoin yield by tearing down the technological barriers that used to exist.
ZeusNode, the core infrastructure built on the Solana Virtual Machine (SVM), serves as the backbone for seamless cross-chain interactions, enabling BTC holders to engage with Solana’s DeFi ecosystem. ZeusNode creates the underlying infrastructure powering its Apollo dApp, which keeps things as simple as possible. Users simply deposit their BTC and get access to a token called zBTC, which is to all intents and purposes, exactly the same as BTC. The zBTC tokens are anchored to the value of BTC, yet the BTC tokens are not held by custodians, but instead locked and protected by the Zeus protocol.
The Zeus Programmable Library introduces concepts such as bidirectional hooks, liquidity management and revenue generation, with Apollo acting as an integration layer that makes Solana DeFi accessible.
Zeus takes advantage of novel capabilities on Solana, with its ZeusNode program leveraging Solana’s Simplified Payment Verification and its cryptography to facilitate secure and trustless Bitcoin operations and ensure the integrity of transactions while maintaining decentralized control. Nodes will propose BTC and Solana transactions and submit them to program states. When doing this, it creates programmable signatures, with nodes relaying signed transactions to the Solana blockchain. If malicious nodes attempt to collude, the honest ones can prevent any misbehavior by submitting fraud proofs, enabling the malicious ones to be slashed, protecting the network.
When BTC is integrated with Solana in this way, users receive zBTC that can be used for lending and other activities on platforms such as Kamino Finance, MarginFi and Solend. Finally, BTC users have a reliable way to generate yield while continuing to hold their BTC tokens, so they don’t have to risk losing out on any profitable gains in its value.
A gateway to Bitcoin yield
It’s because of Zeus and Apollo that Solana is fast-becoming one of the most reliable and trusted platforms for BTC yield generation. Not only does BTC get access to Solana’s DeFi protocols, but it can also take advantage of its efficient infrastructure, which provides the industry’s fastest transaction throughput and some of the lowest gas fee costs of any network. It means the bottlenecks seen on other blockchains, such as Ethereum, can be avoided.
Zeus has plans to expand Bitcoin on Solana in the future, with one of its major initiatives currently in development being Bitcoin-collateralized stablecoins. It’s also planning to add support for Bitcoin Runes and Ordinals, Bitcoin-based NFTs, lending mechanisms and other Bitcoin Layer-2 networks.
By aggregating all of these capabilities under one roof, Zeus will be able to combine Bitcoin’s solid security with the rapid transaction processing and high scalability of Solana, positioning itself as the number one gateway to Bitcoin yield generation.