Image: The Crypto Sight
Jack Dorsey is to launch a DeFi product on Bitcoin on November 19. This comes amid the recent big Bitcoin update that is game-changing for smart contracts.
Taproot, the first major Bitcoin update since 2017, was fully activated on the Bitcoin network on November 13. It added something known as Schnorr signatures, which essentially makes multi-signature transactions unreadable. This will make simple transactions indistinguishable from more complex multi-signature transactions. Among other things, these enhanced signatures are also game-changing for smart contracts, which are self-executing agreements that are stored on the blockchain. Taproot makes smart contracts cheaper and smaller in terms of their blockchain space. Thus, Bitcoin can become a more important player in the DeFi world.
Cryptosrus noted that Dorsey announced last week that TBD will release its whitepaper on November 19, and all signs point to it being a DeFi project on Bitcoin. DeFi on Bitcoin, with execution on the base layer, could be coming soon, and it appears Dorsey was waiting for Taproot before the whitepaper drops.
Many in the crypto community assumed that Dorsey was waiting for the Taproot update to implement some kind of DeFi protocol in Bitcoin. Before the update was activated, this could not be done. While this cannot be confirmed at this time, conjecture continues to circulate in the community. Since Dorsey is a Bitcoin maximalist, he is expected to want to use only Bitcoin.
It is clear that the new project is focused on Bitcoin and DeFi. When announced in July, Dorsey said TBD would be “focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services.” The project is in addition to the Bitcoin hardware wallet he is developing. In a tweet in late August, Dorsey hinted that TBD would be doing something like a decentralized exchange for Bitcoin.
The lead of the project at Square, Mike Brock, said: “This is the problem we're going to solve: make it easy to fund a non-custodial wallet anywhere in the world through a platform to build on- and off-ramps into Bitcoin...You can think about this as a decentralize exchange for fiat." With Taproot, smart contracts will be possible on Bitcoin, but not “fully expressive,” like on other Layer 1's. There is a debate as to just what is possible in terms of smart contracts.
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