The Billion-Dollar Opportunity: BiFi = DeFi + NFTFi
In blockchain networks, each layer of application development aims to capture the liquidity value of the layer above it.
Ethereum, as a public blockchain platform with smart contract functionality, established the ERC-20 token standard early on:
- DeFi Innovations: Projects like DEXs, stablecoins, and lending protocols emerged to harness liquidity from native $ETH and ERC-20 tokens.
- NFTFi Growth: The ERC-721 market birthed lending and fractionalization projects to unlock value from NFTs.
Bitcoin, originally designed for peer-to-peer $BTC transfers, saw limited asset diversity until Ordinals-based assets (e.g., BRC-20, ARC-20) and NFTs (e.g., Ordinals, Bitmap) emerged:
- Ordinals Boom: Inscriptions activated liquidity in Bitcoin’s vast ecosystem, attracting capital and users.
- BeFi Demand: The market now requires leverage and lending solutions (Bitcoin Finance or BiFi).
The BiFi market, covering inscriptions and NFTs, has surpassed $10B**, yet lacks foundational infrastructure like DEXs, stablecoins, and lending protocols. **Shell Finance** fills this gap with a **trustless lending protocol** and **BTC-pegged stablecoin ($BTCx).
Bitcoin-Native Design: Respecting BTC as the Unit of Account
Unlike Ethereum’s dual ETH/USDT user base, Bitcoin operates under a single-asset paradigm:
- Sats as Standard: Inscriptions are priced in BTC/sats, aligning with user habits.
- $BTCx: Shell Finance’s synthetic asset mirrors BTC’s value, simplifying engineering and user experience.
👉 Why Bitcoin-native design matters
Peer-to-Protocol: Merging P2P and Pool Efficiency
Cryptocurrency lending typically uses:
- Peer-to-Peer (P2P): Slow, fragmented liquidity.
- Peer-to-Pool: Unfeasible on Bitcoin’s UTXO model.
Shell Finance’s solution:
- Vault-Based Units: Isolate borrowing positions for flexibility.
- Protocol-Mediated Pools: Matches lenders/borrowers efficiently while maintaining $BTCx peg.
Result: Higher capital efficiency without smart contracts.
Debunking Bitcoin’s "High Costs" Myth
Despite BTC’s high price, UTXO transactions are cheap:
| Action | Data Size | Cost ($65K/BTC) |
|-----------------------|-----------|------------------|
| Borrow $BTCx (600B) | 600 Bytes | ~$20 |
| Repay Loan (400B) | 400 Bytes | ~$12–14 |
Comparison to Ethereum (AAVE):
- Ethereum: ~$50 per operation (70 Gwei).
- Shell Finance saves 75–80% in fees.
Shell Finance’s Core Product
1. $BTCx Stablecoin
- Fully collateralized by BTC.
- 1% borrowing fee (0% interest).
2. Multi-Asset Lending Protocol
- Supports Ordinals, Runes, Atomicals, Stamps as collateral.
- Trustless liquidation via DLCs and PSBTs.
Use Cases:
- Turn illiquid inscriptions into $BTCx for trading/LP opportunities.
- Avoid cross-chain risks with Bitcoin Layer 1 settlements.
How It’s Built: PSBTs and DLCs
Partially Signed Bitcoin Transactions (PSBTs)
- Enables multi-party signing for atomic swaps.
Discreet Log Contracts (DLCs)
Trustless price oracles: Example:
- Alice borrows at 150% collateralization.
- If $ORDI < 225K sats, DLC auto-triggers liquidation without third-party control.
Key Advantage: Users retain asset custody (Your keys, your coins).
FAQs
Q: Why build on Bitcoin Layer 1?
A: Minimize trust assumptions vs. L2/cross-chain solutions.
Q: How is $BTCx stabilized?
A: Algorithmic mechanisms and liquidity pools balance supply/demand.
Q: What assets can I collateralize?
A: Ordinals, Runes, Atomicals, and more—check our docs.
👉 Explore Bitcoin lending innovations