Bitcoin’s DeFi moment has been a long time coming, but it seems the pieces are finally falling into place. A fresh wave of projects is taking shape, bringing decentralised finance to the oldest and most battle-tested blockchain. Among them, Odin.fun has been making the rounds, promising a fully on-chain experience powered by Internet Computer Protocol. The question now is whether BTCfi—Bitcoin-based decentralised finance—will actually take off or fizzle out as another footnote in crypto history.
Dom’s post on X got things moving, throwing the spotlight on BTCfi and Odin.fun, a Runes minter and real-time decentralised exchange. The project runs fully on-chain, with UX and order book functions tied to ICP. The response was swift, with @jonitorsti880 questioning whether this was the right direction for ICP, suggesting the ecosystem should set itself apart rather than follow trends from the past. Dom’s answer was clear—this is what the market wants, but more importantly, it lays the foundation for a fully decentralised BTCfi model that wouldn’t be possible without Internet Computer Protocol.
Bitcoin has historically been a tough environment for DeFi. Its design prioritises security and decentralisation at the cost of flexibility, making smart contract functionality far less advanced than Ethereum or ICP. Several projects have tried to work around these limitations, but most solutions rely on second layers or custodial bridges, which introduce new risks. The arrival of ICP-powered BTCfi suggests there may finally be a way to keep things truly decentralised without compromising efficiency. This isn’t about slapping a new coat of paint on an old idea; it’s about shifting how DeFi on Bitcoin fundamentally works.
The ICP angle is particularly interesting. Unlike traditional Bitcoin sidechains, ICP’s architecture allows smart contract execution without needing wrapped assets or centralised middlemen. This means a project like Odin.fun can operate directly on Bitcoin while leveraging ICP’s speed and efficiency. A fully on-chain order book is a rarity in itself, avoiding the usual problems of off-chain order matching that plague many decentralised exchanges. If this model proves viable, it could set a new standard for how Bitcoin-based financial applications operate.
The market’s appetite for BTCfi remains an open question. Bitcoin’s appeal has always been its simplicity and security, with many in the community viewing additional layers of complexity as a step in the wrong direction. At the same time, the demand for a more efficient and decentralised trading environment is undeniable. Centralised exchanges continue to dominate Bitcoin trading, and recent collapses have only reinforced the need for alternatives that don’t require trust in a single entity.
ICP’s role in this transformation is still unfolding. The protocol has spent years developing its infrastructure, moving beyond the initial hype to build something tangible. With Odin.fun and similar projects stepping up, ICP is positioning itself as the backbone for a new wave of Bitcoin innovation. The idea isn’t to compete with Bitcoin but to enhance its utility without compromising its core principles. Whether BTCfi will turn into a lasting movement or remain a niche experiment is yet to be seen, but the pieces are finally on the board.
