🎧 Latest Pod:The L1 is Back Is Ethereum's dev focus shifting?
p.s. Thanks to WalletConnect. WalletConnect’s token is here, paving the way for decentralized onchain connections! Discover more about the token and our future plans!
Sponsor: Uniswap Labs — Unichain is live! Bridge & swap with Uniswap Labs' web app or wallet.
🟧 Bitcoin Surpasses Google Market Cap. With its latest price surge coming as stocks sink, BTC's total market cap now exceeds GOOG's.
🚔 SEC Charges Exec Over $198M Crypto Fraud Scheme. Paul Atkins appears to be sending a message that crypto crime is indeed illegal, unveiling these charges on his first day as chair.
🤝 Trump Official's Son Planning $3B BTC Venture with Tether and SoftBank. Commerce Secretary Howard Lutnick's son is reportedly inking a bitcoin mega deal at the brokerage firm his father was the long-time CEO of.
📸
Daily Market Snapshot: Crypto prices continue to push higher even as Wall Street struggled with mixed messaging from the White House on what was next for Trump's tariff gamble.
Despite being the most valuable asset in crypto, BTC has long been one of the least used onchain.
While ~23% of ETH supply is active in DeFi, less than 2% of BTC is, according to Bitcoin Layers. That gap isn’t closing overnight — but it is closing. Since a substantial dip last fall, the supply of wrapped Bitcoins has been growing again, with the past three months showing the clearest momentum so far.
What’s more surprising is where the assets are being used. The biggest inflows haven’t landed on chains more actively leaning into Bitcoin integration or promoting themselves as dedicated BTCfi layers; the coins are flowing elsewhere to ecosystems that are easier to use, better integrated, and more liquid.
Let’s dig into where that wrapped Bitcoin is going and what’s pulling it there. 👇
1️⃣ Base
After the release of cbBTC, Base has quietly become one of the most important places for onchain Bitcoin activity — and it’s doing it without flashy campaigns or yield bribes, favoring trust and simplicity instead.
As cbBTC continues to eat up market share, Base has seen the largest increase in wrapped Bitcoins of any chain over the past three months, growing from around 7,500 to over 10,200. A big part of that growth has been driven by Base’s integration with Morpho, which lets users borrow USDC against BTC with very little effort.
In January, Coinbase launched a Bitcoin-backed loan product, letting most U.S. users borrow up to $100K in USDC against their BTC. Powered by Morpho and Base, the program has quickly taken off, with over $140M in cbBTC supporting $70M in active loans — numbers that have doubled in under a month.
2️⃣ Berachain
While Base has thrived in making BTC a loan vehicle, Berachain has thrived by making it a farming vehicle. Since its launch in early February, Berachain has been one of the chains with the highest overall net inflows and has served as one of the largest destinations for wrapped Bitcoins.
Fueled by the chain’s aggressive Proof of Liquidity incentive campaign and occurring while the broader market has chopped down, this growth tells a clear story of users leveraging their most secure long-term hold — Bitcoin — to reliably farm incentives.
As a result, wrapped Bitcoins have become a strong foundation for Berachain’s DeFi markets overall:
Wrapped Bitcoin Dominance in Token Rankings: Four of the top ten tokens on Berachain are wrapped Bitcoins.
Leading Collateral Across Core Protocols: They are also top assets across the largest protocols on Bera: Kodiak’s largest pool is wBTC/LBTC, eBTC is the leading collateral on Dolomite, and SolvBTC is a top pool on Infrared.
Multiple Wrapped Bitcoin Pairs in Largest Pools on Kodiak
3️⃣ Solana
Solana isn’t talking much about Bitcoin, but BTC is still flowing there.
Nearly 7,000 BTC are now active on Solana via wrapped derivatives — the third-largest increase in BTC across chains over the past three months. Just like Base and Berachain, Solana also ranks in the top five chains for net inflows during this time, showing that BTC liquidity is clearly part of that picture.
As a bedrock for liquidity across crypto, it’s not hard to see why people have gravitated towards the chain amidst the market’s downturn. Fast transactions, mature liquidity rails, and composable DeFi have made it a useful place to put BTC to work.
Split Use Cases Across Wrapped Bitcoins: wBTC is actively used across DeFi for market-making, while cbBTC has mostly concentrated in Kamino, where nearly 80% of its supply sits in structured vaults offering discounted USDC borrowing rates.
Concentrated Supply: For Solana, the overwhelming majority of wrapped Bitcoin supply is in wBTC and cbBTC, offering a much tighter selection compared to the other chains that have benefited from BTC flows.
USDC Rewards for Borrowing Against cbBTC on Kamino
4️⃣ Chains Building for Bitcoin
While Base, Berachain, and Solana are already seeing BTC flow into their ecosystems, other chains are leaning harder into the Bitcoin narrative — but haven’t yet seen that effort translate into real capital inflows. For chains like Sui and Starknet, the strategy is to build infrastructure now and hope the flows follow later.
▪️ Sui
In recent months, Sui has leaned heavily into branding and positioning itself as the go-to place for Bitcoin DeFi, launching an ecosystem-wide incentive program as BTC liquidity began to deploy on its chain. As a chain that promises superior security via its MoveVM environment, Sui looks to be using this to court BTC capital, which is understandably wary of venturing onchain to earn yield.
Beyond having a standalone page on their website, Sui’s attracted a series of projects to build the chain into a Bitcoin hub, such as Satlayer, Babylon, Native, Nativerse, and Rhei Finance. Sui’s integration with Babylon will let BTC holders stake their Bitcoin to help secure the Sui network — without giving up custody. This adds a second layer of economic security that supports both Babylon’s protocol and any BTC bridged into the Sui ecosystem.
Starknet has spent the past year aiming to align itself more closely with Bitcoin than any other L2. While actively conducting research on potential future Bitcoin upgrades, the chain has laid down nearly every piece of infrastructure it can: scaling tech, bridging plans, wallet integrations, and incentive programs.
It’s also one of the only L2s actively developing multiple ways to connect to BTC and bridge assets over through both a federated and a BitVM-based bridge while publicly backing potential Bitcoin upgrades like OP_CAT, which would introduce smart contract-like functionality to the orange chain. StarkWare, the team behind Starknet, has even built ZK-proof demos on Bitcoin testnets and has established its own BTC strategic reserve.
The strategy is clear: build first and hope the users come later. But so far, the BTC hasn’t followed in size. Whether this pays off depends on how many holders are willing to cross the bridge once it’s ready.
Building for Bitcoin: Starknet has explicitly said it wants to become “Bitcoin’s execution layer.” It intends to use its zero-knowledge STARK proofs to achieve this, aiming to scale Bitcoin significantly. It also plans to settle transactions on both Ethereum and Bitcoin, further strengthening its role as a bridge between the two ecosystems.
Ecosystem Alignment: To make the transition easier, Starknet has integrated BTC wallet Xverse. Also, the chain’s leading wallet, Braavos, now offers high-yield opportunities for Bitcoin holders. Beyond this, it has also launched BTCfi Season — a campaign designed to bring BTC users into the Starknet ecosystem with incentives and ecosystem rewards.
.@Starknet was designed to scale any blockchain from the start. We’re now bringing this vision to life, beyond Ethereum.
Overall, Bitcoin’s onchain footprint looks to have started growing again.
It’s now flowing into lending markets, farming incentives, and structured DeFi — with Base, Berachain, and Solana pulling in the majority of those flows. That movement isn’t necessarily happening on the chains most loudly courting Bitcoin or designing for BTC from the ground up, though. It’s happening where the liquidity already lives, the UX is clean, and the integrations work smoothly.
Sui and Starknet are betting on the opposite approach: build first, integrate deeply, and wait for the flows. They’re doing the hard work of building long-term infrastructure for more secure, more trustless BTC onchain — but for now, they’re still waiting for the inflows to catch up.
With ETH lagging and much of its DeFi activity flat, more users are looking to put Bitcoin — the most liquid and trusted asset in crypto — to work elsewhere. If the trend holds, BTC won’t just be the largest asset in crypto by market cap. It’ll start to become one of the most useful, too.
Unlock the power of Unichain – a fast, decentralized Ethereum Layer 2 network built to be the home for DeFi and cross-chain liquidity. To bridge tokens to Unichain and start swapping today, get started with Uniswap Labs’ web app or mobile wallet.
Jon Charbonneau and Bread join David Hoffman to unpack Ethereum’s pivotal moment as it faces tough choices to re-focus on its Layer 1.
They break down Ethereum’s shift back toward prioritizing L1 growth, the delicate dance between Layer 1 and Layer 2 strategies, and why Ethereum must reclaim DeFi as its core strength. The conversation also explores the nuanced dynamics between Ethereum’s cultural vision and technical roadmap, how Layer 2s fit into Ethereum’s evolving ecosystem, and what this strategic recalibration means for Ethereum's future in a competitive crypto landscape.
Not financial or tax advice. Bankless content is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time to time, we may add links in this newsletter to products we use. We may receive a commission if you make a purchase through one of these links. Additionally, the Bankless team holds crypto assets.
