Interpreting the Core Value of the BTCFi Track from an Investment Perspective

23,500 BTC, this is an impressive number. As a long-term investor optimistic about Bitcoin and related sectors, I have invested in several BTC project tracks. Among them, a certain project recently released a major update, launching the staking abstraction layer (SAL), and both the operational growth momentum and community response have been quite good.

Currently, there are 23,500 BTC staked in this project, a number that ranks just behind a few well-known large institutions in terms of BTC holdings, surpassing many large mining companies. So, what is the core value of the BTCFi track? What problems does it aim to solve? These are questions that the Bitcoin ecosystem must answer. Let me briefly analyze my understanding of the BTCFi track from the perspective of an investor.

Bitcoin is retracing its steps in the DeFi space

Users who experienced the early DeFi boom are certainly familiar with the concept of "on-chain gun pools."

In my opinion, certain projects are playing the role of a "machine gun pool" in the Bitcoin ecosystem. Everyone can feel that whether it is traditional wrapped Bitcoin or attempts at new Bitcoin assets, they have indeed released the liquidity of Bitcoin, but at the same time, they have also intensified the fragmentation of Bitcoin's liquidity.

Especially for users who find it hard to make choices, wanting to achieve stable and higher returns often requires holding multiple BTC assets in their wallets. Therefore, those full-chain yield and liquidity protocols that adopt a multi-chain, multi-asset strategy essentially act as "yield aggregators" for Bitcoin assets:

Various BTC assets on different chains can be minted into a unified asset, simplifying the user experience in asset management. This also integrates liquidity opportunities of different Bitcoin assets, forming a unified asset pool that provides holders with more diversified yield options.

BTCFi will nurture a large asset package ecosystem.

Bitcoin can be said to have been relatively "isolated" in the past few years.

Looking back at several peaks in the cryptocurrency market, whether it was the ICO boom in 2017, the "summer" of DeFi in 2020, or the subsequent NFT craze, the Bitcoin ecosystem seems to have always been on the sidelines, with BTC regarded as a "non-yielding asset".

However, since last year, more and more projects have started to attempt to provide stable on-chain returns for BTC, gradually transforming it into an income-generating asset. This trend has not only awakened the dormant Bitcoin but also opened the door for BTC to enter the on-chain yield market, marking a redefinition and release of the entire ecosystem's perception of BTC's value.

I have never invested in any ETH staking projects because I believe BTC is more suitable for users to stake. Users holding BTC have the strongest ability to withstand medium to short-term fluctuations, and from the perspective of comprehensive staking returns, BTC's yield attributes are more beneficial for the stable growth of personal assets.

For new Web3 users, the preferred mainstream cryptocurrency to hold remains BTC - this cryptocurrency has a market capitalization of up to $1.35 trillion, is the largest in scale, and has the strongest risk resistance. As long as the opportunities for returns are sufficiently rich and diverse, most holders will be interested in such opportunities.

The imaginative space of certain projects is not limited to staking rewards, but also includes re-staking rewards, trading strategy gains, and more. While this greatly expands the applicability and value of Bitcoin assets, the risks also increase accordingly.

Therefore, the recently launched staking abstraction layer (SAL) is essentially a universal standardized security standard and framework for the Bitcoin staking industry, placing a series of Bitcoin yield and asset management scenarios in a risk-isolated environment. It utilizes smart contract technology and Bitcoin mainnet technology to achieve seamless cooperation between stakers, LST issuers, staking protocols, and other staking service providers, while simplifying user interaction with Bitcoin staking protocols.

To continually expand the Bitcoin staking ecosystem, a universal security layer is needed. The largest project leading this matter is also one of the most suitable choices.

Bet on the Rising Industry with Action

Bitcoin, with a market value exceeding one trillion dollars, has primarily released its liquidity in the form of wrapped tokens like WBTC( in the past, allowing it to cross-chain to the Ethereum network and participate in on-chain scenarios such as DeFi by coupling with the EVM ecosystem. However, the actual liquidity that can be released is only around ten billion dollars.

The investment field is where "myths" are most likely to emerge, but the underlying logic is often very realistic. There has been a rumor in the market about a well-known investor completing an investment in a certain e-commerce giant in "six minutes."

In fact, the e-commerce team is not the first choice and only partner of the investors. On the same day, nearly 10 internet companies, including this team, gathered in the same office, waiting to meet with the investors and their team.

Behind immaturity lies opportunity, betting on the entire sunrise industry with action.

I fully agree with the viewpoint of a partner at a well-known investment institution - if DeFi reaches the same proportion on Bitcoin as it does on Ethereum, it would mean that the total value of DeFi applications on Bitcoin will reach 340 billion USD, which is 25% of the market value of Bitcoin. Over time, its scale may fluctuate between 108 billion USD and 680 billion USD, which is 18% and 50% respectively.

In fact, I also invested in a certain project twice in a row, taking over for myself.

• The first investment was because the founder is one of the few highly potential founders I have ever met. Humble, sunny, straightforward, although young, every time I see him, I can see his cognitive upgrades. In the two years of interaction, I basically witnessed a person's rapid iteration. This is undoubtedly a shot of strong encouragement for investors.

• The second investment is due to the current achievements of the project. Especially during the bull and bear cycles of the cryptocurrency market, it has achieved profitability. With market changes, the project has undergone business iterations or transformations, but as long as it is executed, it can become the first. The logic behind this is a deep insight into DeFi, firm belief, and strong execution capabilities.

However, the Staking/Restaking sector is facing common secondary market pressure - as more and more projects enter the listing stage, heavy selling pressure has been brought to the market to enhance the pre-listing FDV. Therefore, despite many projects having good TVL and revenue structures, the price performance of tokens has remained sluggish, which has also led to questions about the operational models of some early projects, and even affected the performance of related staking assets.

Breaking the curse of the track is not an easy task for BTCFi. Balancing the performance of the secondary market's coin prices is essential to allow investors to see the greater potential of the Bitcoin staking ecosystem.

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