Bitcoin (BTC) maximalist and CEO of Microstrategy, Michael Saylor, thinks that Bitcoin and Lightning Network (LN) will come to the rescue of the DeFi industry in light of the recent breaks in the decentralized finance (DeFi) sector.
The DeFi industry is going through a difficult period with the difficulties that two major protocols, Terra and Celcius, have had recently. Michael Saylor also suggests in a recent tweet that Bitcoin and Lightning could stabilize the industry.
According to Saylor, Bitcoin could provide a solid economic and technical foundation for Defi.
The sound ethical, economic & technical foundation for DeFi is #Bitcoin. The next generation of DeFi will be built using the #Lightning⚡️ protocol and the #BTC token.https://t.co/5LlNlXkLMt
— Michael Saylor⚡️ (@saylor) June 14, 2022
Saylor expressed several key concerns in the DeFi space in his response to Bloomberg’s story on Tuesday. brought. Mahin Gupta, founder of digital asset custody platform Liminal, told Bloomberg:
“What happens in Celsius will have a serious impact on the industry. He is not a minor player for the industry and this failure will have ripple effects.”
Celsius Network has closed withdrawals and other transactions on its platform just one month after the extraordinary collapse of the Terra blockchain, which attracted investors with an annual return of about 20 percent. The Terra ecosystem, which collapsed after losing its 1-to-1 stable value against the US dollar, and Celsius’s stopping of withdrawals caused other cryptocurrencies to lose value by moving downwards.
As a result, MicroStrategy’s CEO is very enthusiastic about Lightning Network, Bitcoin’s layer 2 (layer-2) scaling solution. “Bitcoin is the future of money and the Lightning protocol will help with transaction scalability” who says Saylor continued his sentences with these words:
“If you want to make payments and other transactions at high speed, you will need a solid foundation layer ethically, economically and technically. That’s exactly what we’re talking about Bitcoin. In the continuation, you will be able to process billions of transactions in the 2nd layer like Lightning.
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According to Wil Lee, creator of NFT projects, BTC and LN can provide an energy boost in DeFi and NFTs. Speaking to Cointelegraph, Lee said that while several new protocols are still in the experimental phase, protocols such as BTC and LN are already showing their potential.
“The first thing anyone wanting to get into crypto should make sure of is stability. To give an example from myself, in any project, I have peace of mind if there is a built-in protocol. Also, if your DeFi or NFT project is backed by BTC, it will have a lot more buyers.”
On top of all that, according to Aliasgar Merchant of Ignite, DeFi is going through tough times and everyone is doing their best to survive the crypto winter. Showing the failure of DeFi, which is thought to be the core of Web3, and the recent events in Terra and Celius as proof, Merchant said that the two most important pillars of developing a solid DeFi system are interoperability and scalability. “If we build a solid foundation, we can begin to focus more on niche protocols to meet our DeFi needs,” Merchant said.