Bitcoin finds ‘another’ use case via BTCfi — DLC.Link co-founder

DLC.Link CEO Aki Balogh tells The Agenda how DeFi on Bitcoin will unlock BTC’s potential for collateral, yield farming and more.

Bitcoin might be one of the best investments of all time, and many investors believe its best days are still ahead. If Bitcoin does reach the $100,000 to $3 million price target that various analysts have predicted, that’s a win for holders. Still, data also shows that they are reluctant to spend their BTC, and generally, they are terrible with timing when to sell and when to buy. 

The Bitcoin (BTC) market has a “stranded value” characteristic where a cohort of investors are unable (or unwilling) to benefit from BTC’s price upside. The market itself has limited safe opportunities for holders to earn yield, use BTC as collateral and easily access some of the lucrative features of decentralized finance (DeFi).

To discuss the new developments happening in Bitcoin, The Agenda podcast hosts Ray Salmond and Jonathan DeYoung spoke with DLC.Link co-founder and CEO Aki Balogh.

“Two years ago, Bitcoin was mostly like a pet rock”

To start the conversation, Balogh explained that many people “had done quite well holding” Bitcoin, but it was difficult to realize the gains or even unlock some of the sidelined capital.

“If you have all this capital, why just let it sit on the sidelines? Why not use it? For example, you could invest it and earn more, you know, more yield, earn more currency with it, more tokens.”

Balogh said that Bitcoin has a $1.35 trillion market cap. Yet, investors’ options over the years have been centralized options like BitGo, which issued WBTC as an IOU for customers’ provided BTC and experimental DeFi platforms, often putting investors’ funds at risk of a total loss.

DLC.Link takes a different approach, where “our depositors lock the Bitcoin with themselves.”

“We call it self-wrapping. And then that means DLC BTC on Ethereum. Of course, the DLC BTC can be verified because you can see that it’s locked on-chain, that it’s in a specific UTXO on Bitcoin and then get the DLC, BTC, use it, invest it. So it’s backed by real Bitcoin. And then, when the DLC BTC is burned, then that unlocks the Bitcoin.”

When asked about custodial risk and security threats, Balogh explained:

“We never get anybody’s Bitcoin. We’re not a chain. We’re not a custodian. We make the software that lets you lock with yourself. And that’s and that just kind of keeps it in a very safe way. Because as long as you have your private key, which, you know, if you lose your private key, that’s in all of crypto. Like we can’t recover it, of course, but as long as you have your private key, you will always have access.”

Related: BlackRock adds own Bitcoin ETF to income and bond funds

To hear more from Balogh’s conversation with The Agenda — including alpha on new features and plans for DLC.Link — listen to the full episode on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And don’t forget to check out Cointelegraph’s full lineup of other shows!