Decentralized finance (DeFi) will turn Bitcoin from a passive store of value into an asset that can challenge traditional finance, prominent figures in the Bitcoin space say.

At the Bitcoin 2025 conference in Las Vegas, speakers shared a conviction that Bitcoin’s infrastructure will power the next generation of DeFi applications in the network’s next chapter, echoing the calls of early builders who envisioned a parallel financial system to fiat currency. 

The conference featured DeFi projects like the Liquid Network, which was joined by emerging Bitcoin DeFi companies looking to expand the decentralized “tech set” in the Bitcoin ecosystem. 

It had a broad consensus that Bitcoin is the bedrock of finance, and its rising DeFi movement is advocating for the expanded use of Bitcoin's infrastructure.

Developers pioneering the next phase of Bitcoin DeFi

At the heart of the expanding Bitcoin DeFi movement is a fundamental premise that Bitcoin is too big and important to remain passive. 

Jacob Phillips, co-founder of Lombard Finance — a liquid staking protocol — told Cointelegraph, “Bitcoin DeFi is about building a trustless, permissionless financial system around Bitcoin, turning it into an active financial instrument, not just a vault.” Lombard’s LBTC supports this shift by enabling users to stake Bitcoin on the Babylon blockchain for yield while using the token in DeFi applications like lending and trading on platforms outside of the Bitcoin network. 

Meanwhile, Adrián Eidelman, product director at RootstockLabs, championed Bitcoin’s layer 2 (L2) as the foundation for smart contracts and financial inclusivity. “There’s no other blockchain, no other place better than Bitcoin to be the foundation of a new financial system,” he told Cointelegraph. Rootstock’s merged mining hit an all-time high in Q1 2025, which shows the growth in sidechains and federated bridges that can extend Bitcoin’s functionality without compromising its core security.

Charlie Hu, co-founder of Bitlayer, underscored the need for finality and self-sovereignty. Hu outlined the importance of using the Bitcoin base layer for finality and security and not relying on sidechains, he told Cointelegraph, outlining a path that fortifies Bitcoin’s base layer with new DeFi infrastructure.