Binance Labs pivots investment strategy towards Bitcoin DeFi

Binance Labs, the venture capital (VC) division of the world’s largest cryptocurrency exchange, has announced an investment in BounceBit, a restaking protocol for Bitcoin. This protocol combines centralized finance (CeFi) and decentralized finance (DeFi) features to enhance the utility of Bitcoin. BounceBit is part of a new wave of protocols that aim to bring DeFi capabilities to Bitcoin, known as Bitcoin DeFi (BTCFi). The goal is to expand Bitcoin’s use case beyond being a store of value and transform it into a yield-generating asset with greater capital efficiency. The proof-of-stake (PoS) layer-1 ecosystem incentivizes validators to stake both Bitcoin and BounceBit ecosystem tokens. This dual-token economy aims to create more utility for Bitcoin. Binance Labs, which became an independent venture capital arm after separating from Binance exchange in March, has a portfolio worth over $10 billion and has supported over 250 projects from more than 25 countries. BounceBit currently serves over 110,000 users and has a total value locked (TVL) of over $782 million. The rise of BTCFi protocols comes ahead of the Bitcoin halving event on April 19, signaling the increasing demand for Bitcoin-native DeFi. MerlinSwap, a decentralized exchange (DEX), raised 6,599 Bitcoin worth $480 million during its initial DEX offering (IDO) on April 5, demonstrating the market’s interest in BTCFi. It is believed that BTCFi could rival Ethereum in DeFi innovation in the future.