Cardano founder Charles Hoskinson has unveiled the Cardinal Protocol, a new Bitcoin-focused decentralized finance (DeFi) platform operating on the Cardano blockchain. The solution enables Bitcoin holders to participate in lending, borrowing, staking, and yield farming activities without relying on third-party custodians.
The protocol leverages wrapped Bitcoin UTXOs secured by MuSig2 multi-signature technology, ensuring safe asset transfers between networks. This design enhances cross-chain interoperability with Ethereum, Solana, and Avalanche while allowing users to trade Bitcoin-based assets on Cardano decentralized exchanges like MinswapDEX and SundaeSwap. Notably, Bitcoin Ordinals can be utilized as loan collateral within the ecosystem.
Future upgrades will incorporate zero-knowledge proofs for enhanced privacy, improved wallet connectivity, and advanced liquidity solutions. The launch aligns with industry-wide efforts to democratize financial services through decentralized technologies, expanding Bitcoin’s utility beyond its native blockchain.