Definition ∞ Bitcoin DeFi refers to the application of decentralized finance principles and protocols to the Bitcoin blockchain, enabling financial services without intermediaries. This encompasses a range of activities, including lending, borrowing, and trading, often facilitated through smart contracts or sidechains connected to the Bitcoin network. The aim is to extend the utility of Bitcoin beyond simple value transfer, fostering a more dynamic financial landscape.
Context ∞ Bitcoin DeFi represents a burgeoning area of innovation within the cryptocurrency space, facing persistent debates regarding its technical feasibility and security. Key discussions involve the development of interoperability solutions and the integration of more sophisticated smart contract capabilities onto or alongside the Bitcoin ledger. Attention is focused on how these advancements will influence Bitcoin’s role in the broader decentralized economy and attract new forms of capital.
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