Cardano Launches Cardinal, a Decentralized Finance Protocol for Bitcoin Users

Cardano has introduced Cardinal, its first decentralized finance (DeFi) protocol designed specifically for Bitcoin users. Developed by Input Output, Cardinal allows Bitcoin holders to access DeFi services such as lending, staking, and borrowing without traditional custodians or centralized bridges. The protocol uses a trust-minimized structure, MuSig2, to ensure secure transactions and maintain decentralization. Key features include:

• Wrapped tokens**: Cardinal converts unspent transaction outputs (UTXOs) into wrapped tokens, maintaining a 1:1 peg with Bitcoin.
• Rethypothecation**: Users have complete control over their assets, and the original Bitcoin stays locked on its native chain.
• BitVMX**: An off-chain execution system enables complex Bitcoin operations and facilitates safe asset transfers between networks.

Cardinal aims to bring in new liquidity and provide more ways for Bitcoin holders to use their assets within a DeFi environment without leaving the Bitcoin ecosystem.