Jack Dorsey announces new Square Business for Bitcoin-based DeFi

  • The new Square business will have an “open roadmap, an open development, and open source” for Bitcoin DeFi.
  • The platform will heighten competition for Ethereum-based DeFi, which has smart contract capability and interoperable ‘Money Legos’.

Jack Dorsey, founder, and CEO of Square, Inc, has unveiled via Twitter a new Square business to provide Bitcoin DeFi services. The new division will join Seller, Cash App, and Tidal in line with Square businesses. Dorsey stated that the main objective of developing such a platform is to provide “non-custodial, permissionless, and decentralized financial services”. Named TBD, the Square business will primarily utilize Bitcoin.

Additionally, the Twitter Inc co-founder and CEO stated that similar to their new Bitcoin hardware wallet, TBD will be open for public use. The business’ roadmap and development will be visible to the public, in addition to being open source.

Dorsey went on to name the lead for the TBD team as engineer Mike Brock, who in turn appointed a founding team. Back in 2018, Brock led the development team that integrated Bitcoin features on Cash App. More so, he worked with Red Hat Inc., an open-source solutions provider, giving him vast experience in the field.

“…we have some ideas around the initial platform primitives we want to build,” part of Dorsey’s Tweet read.

Square new business unit-TBD

The TBD platform is likely to heighten competition for Ethereum-based DeFi, especially due to Square’s repute. However, the Bitcoin network is yet to incorporate smart contract capability, which Ethereum-based DeFi already has. Ethereum also takes pride in its interoperable ‘Money Legos’. For now, Bitcoin’s DeFi is fully dependent on additional infrastructures like side chains and bridges to initiate smart contracts.

Currently, Ethereum commands the top 100 DeFi platforms according to total value locked (TVL), going by data from DeFi Llama. At the top of this list is AAVE with a TVL of $9.09 billion. Ethereum is rivaled by Binance whose platforms include the eighth-ranked PancakeSwap, with a $3.76 billion TVL.

In comparison, DeFi Llama states the highest-ranked Bitcoin-based project as the Lightning Network, at 103rd position with a $58.7 million TVL. Nonetheless, measuring Lightning Network’s utility using TVL may not be the best approach.

According to data from Dune Analytics, Ethereum-based DeFi has experienced massive growth this year. In terms of unique addresses, the total DeFi user base has grown to roughly 3 million in July. This figure represents a 172.7 percent increase from 1.1 million at the beginning of the year.

More developments in Bitcoin blockchain

In addition to Square’s latest DeFi project, something else that could trigger increased adoption of BTC-based DeFi is the Taproot upgrade. Reportedly, the upgrade is due in mid-November and will pave the way for BTC smart contracts. Dorsey also recently suggested that the Tidal streaming service may have a blockchain tech integration such as NFTs or smart contracts.

Prior to the Bitcoin DeFi announcement, Dorsey had announced on Twitter that Square would be launching a Bitcoin hardware wallet. The device would provide assisted custody to ease such a process for mainstream users.

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