The issue of low liquidity and excessive charges on Bitcoin Layer 2 platforms has been a serious hindrance for merchants and tasks trying to make use of these platforms for exchanging, buying and selling and launching property. This can lead to missed alternatives, gradual transaction instances and better prices. Velar goals to unravel this drawback by enabling seamless asset exchanges, buying and selling and launches on the main Bitcoin Layer 2 platforms, offering unparalleled liquidity and adaptability.
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Introducing DeFi to the Bitcoin ecosystem
Giving custody of Bitcoin to centralized exchanges has led to disastrous outcomes, as now we have seen prior to now. Earlier than Velar’s beginning, Mithil Thakore ran a crypto-focused hedge fund and as a result of mismanagement of the exchanges, he skilled first-hand the results of those centralized platforms. This solely strengthened his perception in decentralized finance and the necessity for a safe and clear resolution within the Bitcoin ecosystem.
“As a long-term resolution, the one method to maintain and develop cryptocurrencies is to construct DeFi on Bitcoin, the place folks do not have to offer custody of their Bitcoin to centralized exchanges.”
Mithil Thakore, co-founder and CEO of Velar
Mithil explains by saying that he does not like the thought of bridging Bitcoin property to different platforms like Ethereum or Solana as a result of they’re centralized to some extent. These are the explanations for the creation of Velar – the one-stop DeFi resolution and liquidity protocol for Bitcoin. That mentioned, the dialog turned in direction of how BTC maxis would possibly understand this kind of innovation on the Bitcoin community.
Addressing BTC Maxis’ issues
BTC maximums are typically identified for his or her sturdy perception that Bitcoin needs to be held as a retailer of worth and that they are not looking for it for use for transactions. Nonetheless, Mithil and the staff at Velar imagine that integrating DeFi into Bitcoin can truly enhance its worth proposition. It’s because DeFi brings extra utility to Bitcoin, permitting it for use for greater than only a retailer of worth. Moreover, by offering liquidity to the Bitcoin ecosystem, DeFi can assist enhance general market stability and scale back volatility.
“Bitcoin is probably the most safe blockchain.”
Mithil Thakore, co-founder and CEO of Velar
Mithil sees Bitcoin as a type of ‘Digital Gold’ in addition to the Bitcoin blockchain itself. It isn’t only a retailer of worth and forex, however a safe blockchain that can be utilized for numerous purposes, together with DeFi. He believes that BTC maxis ought to embrace this potential and never be afraid of innovation and development throughout the Bitcoin ecosystem. As the muse of the monetary infrastructure that may run parallel to the centralized mannequin, Velar goals to work as seamlessly as potential with Bitcoin whereas nonetheless providing the advantages of decentralization.
How Velar’s imaginative and prescient can change into actuality
Regardless of BTC maxis’ issues, Velar continues to pursue his imaginative and prescient of bringing DeFi to Bitcoin. The staff stays dedicated to offering a safe platform for customers to entry DeFi companies on the Bitcoin community. Bitcoin’s core community is not going to be modified, however constructing round it to enhance its capabilities might convey extra worth and potential to the community.
“The Bitcoin blockchain has restricted capabilities.”
Mithil Thakore, co-founder and CEO of Velar
As Mithil envisions it, DeFi on Bitcoin will be like including a brand new layer to the present infrastructure. Simply because the Lightning Community enabled immediate, low-cost transactions for Bitcoin, DeFi can introduce new use instances and companies for the community. It would additionally permit Bitcoin to compete with different sensible contract platforms and blockchain networks that at the moment dominate the DeFi house.
Bitcoin’s superior safety and community benefit
It is no secret that the Bitcoin blockchain has restricted capabilities in comparison with different sensible contract platforms. Nonetheless, Mithil believes that this was the best choice for Velar because of its safety and robustness. With a market cap of over $1 trillion and being probably the most trusted and established cryptocurrency, Bitcoin serves as the perfect basis for a DeFi platform.
“The secret is utilizing the safety that the Bitcoin blockchain offers.”
Mithil Thakore, co-founder and CEO of Velar
Mithil explains by saying that that is the first purpose for his or her choice to construct on Bitcoin as probably the most ‘moral’ method to function within the house. By leveraging Bitcoin’s safety, Velar can be certain that customers’ funds and knowledge are protected always. That is particularly vital on the earth of DeFi, the place hacks and exploits have change into a typical prevalence.
The community impact and PoW consensus mechanism are additionally the reason why Bitcoin was the best choice for Velar. The community impact refers to the concept that as extra folks use and undertake a know-how or platform, its worth will increase. Since Bitcoin is probably the most extensively used and acknowledged cryptocurrency, it already has a big community impact that Velar can leverage. “The proof-of-stake mechanism that different blockchains supply isn’t but confirmed,” says Mithil.
Perception into Velar’s product providing
With a beginning product of a easy automated market maker DEX, Velar desires to discover what is feasible on the Bitcoin blockchain. In simply six weeks they obtained 165,000 customers on their testnet. This made them understand that there was an actual demand for DeFi on Bitcoin, and with this realization they began engaged on launching their mainnet.
“We’re constructing a spread of merchandise with Bitcoin finality.”
Mithil Thakore, co-founder and CEO of Velar
From there, Velar’s staff started constructing extra complicated merchandise, like their perpetual trade. This offers customers the power to make use of leverage for his or her transactions, one thing that was beforehand unavailable on the Bitcoin blockchain. This brings extra dangers, however Mithil believes this may appeal to massive corporations, resembling hedge funds, which might be competent of their danger administration.
By catering to each the retail and institutional ‘urge for food’ for DeFi on the Bitcoin blockchain, Velar is positioning itself to change into a serious participant on this house. Whereas Mithil was all set to announce their subsequent set of choices, it’s clear that they’re continually working to convey extra choices and options to their customers.
An L2-agnostic method
Velar is an utility layer constructed on a number of L2s. This method differs from different DeFi platforms which might be constructed on particular L2s, which can restrict their potential attain and adoption. By being agnostic to totally different L2 options, Velar can faucet right into a broader person base and supply extra flexibility to their customers. Stacks was one of many L2s talked about as a associate for Velar throughout this interview.
This agnostic method additionally permits Velar to adapt to new L2 options as they come up, making certain they’re all the time on the forefront of innovation within the DeFi house. This places them in a robust place for development and adaptation in an ever-evolving trade. The Bitcoin ecosystem continues to be new in comparison with Ethereum, however with the fast improvement of L2 options and tasks like Velar, we will count on to see a rise in DeFi exercise on the Bitcoin blockchain.
Mithil Thakore encourages L2s to deal with safety as they proceed to develop and appeal to extra customers. Because the DeFi trade continues to increase, safety will change into an more and more vital issue and be on the core of Velar’s mission. By partnering with respected and safe L2 options, Velar can present their customers with a safe and dependable platform, however Mithil admits that that is nonetheless in its early phases and there may be all the time room for enchancment.
Ultimate ideas
Mithil Thakore desires of a life for the subsequent era the place they’ve the selection between centralized banking and DeFi on Bitcoin via Velar. This can be a daring imaginative and prescient, however with the rising demand and potential of DeFi on Bitcoin, it’s not not possible. With their progressive product choices and deal with person expertise, Velar has the potential to faucet into the community impact and change into a number one drive within the evolving world of safe decentralized finance.