Decentralized finance gained enormous popularity in 2020 during “DeFi” summer, and three years later, the Bitcoin Renaissance movement aims to bring this category of applications to Bitcoin. But the origins of nearly every type of application commonly used in the decentralized finance industry today can be traced back to the Bitcoin blockchain. Understanding the true and often forgotten history of decentralized finance includes stablecoins, collectibles, exchanges, and token launches that all began with Bitcoin. Botanix Labs, alongside an army of other builders, is committed to bringing DeFi back to Bitcoin.
The Early DeFi Days on Bitcoin
The biggest stablecoin was first deployed on Bitcoin.
Finding anyone in crypto who isn’t familiar with Tether is a difficult task, but many people aren’t aware that it first launched on the Bitcoin blockchain. Today, the Tether stablecoin is supported on a multitude of Layer 1 and Layer 2 networks like Solana, Arbitrum, and many others. But in October 2014, the first blockchain to support Tether was Bitcoin using the Omni Layer protocol. In August 2023, the Tether team announced a strategic decision to discontinue support for its stablecoin on Bitcoin.
The origins of NFTs happened on Bitcoin.
Even though the first collections of non-fungible tokens were not minted on the Bitcoin blockchain, the ideas that pioneered this type of digital asset have their origins from Bitcoin. Called “colored coins,” this innovation on Bitcoin was an attempt to create a new type of asset that would take "ordinary bitcoins" and turn them into "colored bitcoins."
Much discussion and literature around this topic was shared in 2012 and 2013, including the Colored Coins whitepaper. Enthusiasm around colored coins also caused a then-significant inflow of venture capital for Bitcoin startups that wanted to make this idea a reality, including Colo, CoinSpark and CoinPrism. “Rare Pepes” were the first NFT collection launched on Bitcoin in 2016 using the Counterparty protocol, which was the first project to bring smart contracts to the world of colored coins.
The first DEXs were built on Bitcoin.
Early primitives of decentralized and peer-to-peer exchange platforms entered the crypto market in 2014, but very few people used them. Bisq was one of the first movers in this category of applications, and its sole purpose was to “a powerful tool for bitcoiners that want to be able to buy and sell bitcoin peer to peer whilst maintaining their privacy, not having to undergo arduous KYC processes, and keeping control of their bitcoin.” Bisq v1 launched on mainnet in April 2016. The Ethereum token presale launched three months later.
The first tokens were launched on Bitcoin.
Founded in 2013, the Counterparty protocol played an important role in the early token issuance activities of the crypto industry. Counterparty was built to be a peer-to-peer financial platform and a distributed, open source protocol built on top of Bitcoin, and it quickly became the most popular crowdsale platform for new token projects in the industry at the time. Its relevance was later eclipsed by the Ethereum blockchain, but the network has over 230,000 assets issued on it.
The Future of DeFi on Bitcoin
Bitcoin is home to the first and biggest instances of the most popular applications in decentralized finance.(DeFi) In recent years, a significant cultural shift has pushed Bitcoin away from pursuing a thriving DeFi ecosystem, but that trend is quickly reversing. It’s not surprising that many Bitcoin users and investors are not familiar with Bitcoin’s DeFi origins, but what started on Bitcoin – stablecoins, DEXs, token launches, NFTs, and more – will soon come back to Bitcoin. That’s the future of DeFi, and that's why Botanix Labs is building the Spiderchain.
