Branden Sedo, a Core DAO contributor, predicts that Bitcoin’s decentralized finance (DeFi) Total Value Locked (TVL) will surpass Ethereum’s within two years. Speaking at Korea Blockchain Week, Sedo highlighted that Bitcoin’s $1 trillion ecosystem has untapped potential to move on-chain, especially as trustless bridges, roll-ups, and other scalability solutions emerge. This influx of liquidity could drive Bitcoin-based DeFi applications to rival and eventually overtake Ethereum’s dominance in the space.
Several factors support this outlook. The recent approval of Bitcoin spot ETFs has stirred institutional interest, which could drive more capital into Bitcoin sidechains like Core and Stacks. These sidechains offer non-custodial staking and secure bridging solutions, making it easier for Bitcoin holders to engage in DeFi without risking custody or private key control. Sedo noted that Core, currently the largest Bitcoin sidechain, offers a 3% yield on locked Bitcoin, paid out in CORE tokens used for governance and gas fees.
However, achieving this flippening will require a significant shift in the mindset of Bitcoin holders. Many are still skeptical about yield-bearing DeFi products after losing assets in high-profile platform failures like BlockFi and Celsius. Despite this, Sedo is optimistic, citing a growing willingness among Bitcoiners to explore non-custodial DeFi applications. This gradual shift in sentiment, coupled with technological advancements, could pave the way for Bitcoin to outpace Ethereum in the DeFi sector by 2026.
The development of trustless solutions, like LayerZero’s bridging protocol, is key to unlocking Bitcoin’s potential. As more Bitcoin liquidity flows into sidechains, the ecosystem could see exponential growth, potentially flipping Ethereum’s long-standing DeFi dominance.