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Binance Labs, the venture capital arm of cryptocurrency exchange Binance, has announced an investment in BounceBit, a Bitcoin-native restaking protocol that combines centralized finance (CeFi) and decentralized finance (DeFi) features.
The investment comes as Bitcoin DeFi (BTCFi) protocols gain traction ahead of the anticipated Bitcoin halving event expected by April 19. However, the exact terms and figures behind the investment have not been disclosed.
BounceBit was designed to expand Bitcoin’s use case beyond being a store of value by transforming it into a yield-generating asset with increased capital efficiency. The protocol’s proof-of-stake (PoS) layer-1 ecosystem encourages validators to stake both Bitcoin and BounceBit ecosystem tokens, creating a dual-token economy designed to enhance Bitcoin’s utility.
“It is our mission to build restaking infrastructure to drive the utilization of Bitcoin and we want to do it in a secure and transparent manner,” shares Jack Lu, founder and CEO of BounceBit.
The restaking infrastructure provided by BounceBit seeks to drive the utilization of Bitcoin by leveraging regulated custody and Multi-Party Computation (MPC) solutions. The protocol also employs Ceffu’s Mirror X and off-exchange settlement (OES) solutions to minimize counterparty risks. According to Binance co-founder and Binance Labs Head Yi He, BounceBit’s protocol “unlocks new avenues for Bitcoin’s utilization” by fusing centralized finance with decentralized finance (CeFi and DeFi).
According to BounceBit, their protocol currently serves over 110,000 users, with over $782 million in total value locked (TVL). The platform’s focus on merging CeFi and DeFi features has attracted the attention of Binance Labs, which has been seeking projects poised to shape the industry with innovative solutions.
The investment in BounceBit is part of a broader trend of growing interest in BTCFi protocols, as demonstrated by the recent success of MerlinSwap’s initial DEX offering (IDO). The decentralized exchange raised 6,599 BTC, worth approximately $480 million, from over 52,000 investors on April 5, showcasing the demand for Bitcoin-native DeFi solutions.
While BTCFi protocols have gained momentum in recent months, it remains to be seen whether they can match the level of innovation and adoption seen in Ethereum-native DeFi protocol. With the Bitcoin halving in a matter of days, more projects are entering the BTCFi space, and the competition to develop secure, transparent, and efficient DeFi solutions on the Bitcoin blockchain is expected to intensify.
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