Velar, the Bitcoin liquidity protocol building on the Stacks Layer-2 infrastructure platform, has hit a key milestone with the launch of its automated market maker Dharma, which promises to bring DeFi liquidity into the wider Bitcoin ecosystem.
Velar first came to prominence last May when it launched its mainnet in beta, outlining a simple yet sophisticated framework that will bring native DeFi functionality to Bitcoin itself. The protocol leverages Bitcoin’s industry-leading base security and transaction finality, while achieving scalability and high transaction throughput via Stack’s L2.
The developers of Velar have grand ambitions, with plans to create a native DEX platform, followed by DeFi functions such as liquidity pools, yield farming protocols, staking infrastructure and a project launchpad, with each one set to be a standalone dApp. It also plans to mint various bridged or wrapped versions of top cryptocurrencies and fiat currencies on its network, so these can also be utilized in Bitcoin’s nascent DeFi ecosystem.
Velar utilizes the smart contract capabilities of Stacks to bring DeFi capabilities to Bitcoin, and will also feature its own token, called VELAR, with utility such as staking, paying for gas and governance just some of its applications.
The potential of native DeFi on Bitcoin is self-evident. Today, the vast majority of DeFi activity occurs on Ethereum and other smart contract chains, but each of these ecosystems is dwarfed by the size of Bitcoin, which has a fully diluted market capitalization of more than $1.3 trillion, representing 52.31% of the total market for all cryptocurrencies. That means more than half of all crypto assets are currently idle, serving no purpose other than a store of value. By bringing DeFi to Bitcoin, it’s believed that projects like Velar will pave the way for the creation of an entirely new ecosystem of DeFi dApps that can unlock billions of dollars in tied-up BTC capital.
Dharma, which is Velar’s native AMM, will be a key enabler of its future plans. It serves as a liquidity protocol that sits atop of Bitcoin via the Stacks smart contract layer, and facilitates various DeFi-native functions, such as token swaps and launchpad infrastructure. These capabilities position it to become an essential building block for true DeFi on Bitcoin.
The V1 Dharma release introduces Velar’s native DEX, which paves the way for token pairs to be traded on-chain within the Bitcoin ecosystem. It also provides advanced tooling for liquidity provision, trading and asset management on Bitcoin. At launch it will kick off with two token pairs – STX-ABTC and STX-AEUSDC – which will be followed by the launch of additional token pairs in the coming weeks. By leveraging the robust security of Bitcoin’s base layer, the Dharma AMM is an extremely reliable and secure, yet also very user-friendly platform that will provide a solid foundation for DeFi dApps and services on Bitcoin. Ultimately, its creators say they want Dharma to become the de facto standard for how DeFi operates on Bitcoin.
Mithil Thakore, the chief executive officer of Velar, said the launch of Dharma is not only a key milestone, but also a testament to the project’s determination to transform the DeFi landscape by leveraging Bitcoin, the world’s most valuable cryptocurrency. “By offering users the opportunity to leverage the power of their assets in a secure, non-custodial environment, we’re paving the way for a new era of financial freedom,” he said.
More importantly, he added, Dharma represents not just a new product launch, but the launch of a new movement that promises to “shape the future of decentralized finance on Bitcoin.”
Source: Depositphotos
