Cardano Cardinal, a new protocol aimed at connecting Bitcoin to the ecosystem of decentralo financing Cardano (Defi).
The advertisement, made by the founder of Cardano Charles Hoskinson on June 9th during the Bitcoin 2025 conference, is a strategic transformation to extract liquidity from the wide Bitcoin network to Cardano’s smart infrastructure.
Welcome to the first Bitcoin Defi Protocol to Cardano
Cardinal enables users to lend, borrow and share Bitcoin without leaving the original Bitcoin series or using traditional trustee.
The launch comes at a time when the total value of Cardano Defi (TVL) decreased from $ 415 million in May to $ 334 million on June 10, According to Dolama.
Bitcoin integration without bridges or trustees
Cardinal is designed to bring Bitcoin to the DEFI space by wrapping the UTXOS outputs (UTXOS) and converting them into square: 1: 1 with bitcoin.
This allows Bitcoin holders to use their assets on the Cardano platform without relying on central bridges or guards. This process is upside down, allowing users to restore their bitcoin at any time through a safe and verified way.
Unlike the traditional coated BTC protocols that often depend on the central power, the cardinal works using Musig2, which is a multi -signed encryption scheme.
This technology enables many participants to sign cooperative transactions, while maintaining Bitcoin guarantees.
As long as at least one party in the network behaves frankly, the system remains safe, and the bitcoin remains wrapped closed on the original series.
No Rehypothecation, more asset control for users
One of the main discrimination of Cardinal is his position on rehabilitation. In many financial systems, the guardians return the deposited assets-often without a complete awareness of the user.
Cardinal removes this risk by preventing mediators from controlling the user’s assets, giving the bearer a full vision and ownership during the Defi process.
The smart nodes frame for Cardinal avoids unnecessary centralism by taking advantage of BitvmX-an out-of-chain account protocol.
Bitvmx allows users to perform complex operations that include Bitcoin, without the need to settle on decentralization.
When he paired with Cardano Smart Smart contracts, this configuration allows smooth asset movement between Blockchains.
Demo Demo Live BTC-Cardano offers use
At the Bitcoin 2025 event, the IO Entry Company (IO), the search and development company behind Cardano, has shown the transfer of the unuspread BTC-To-Cardano assets using Cardinal and BitvmX.
The direct demonstration was an evidence of the concept, which confirms the ability of the Cardinal to bring the liquidity arising from Bitcoin to the Cardano Defi platforms.
This step comes at a time when Cardano aims to enhance TVL and restore Defi traction. According to Defillama, the Cardano Defi market has witnessed a decrease in the closed value since its peak.
By providing the arrival of the direct Bitcoin users without leaving their original network, Cardinal can provide injection of liquidity needed to revive the activity on the Cardano series.
Market effect and future road map
The infrastructure of the port in Kardano has historically struggled to match the hegemony of Ethereum or Solana. However, Cardinal is a new model for bitcoin incorporation in an unanimous manner.
The protocol can not only lend and borrow with bitcoin cabbage only, but also provides inter -operating via ecosystems – one of the main bottlenecks to expand Defi.
The output was not announced after the start of the start of the operation on a large scale, but it is planning to continue the Cardinal test under the circumstances of the real world.
The team is likely to focus on increasing cardinal’s dependence among Bitcoin users looking for Defi’s exposure without prejudice to nursery or decentralization.
This step also reflects a wider direction in the DEFI space, as the latest protocols give priority for assets, encryption security and inter -operation.
If it succeeds, the cardinal can put a precedent for how to integrate the main ecosystems of Blockchain from Bitcoin, and how Bitcoin develops from a negative value of the value to an active player in decentralized financing.
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