Charles Hoskinson, the founder of Cardano, has introduced Cardinal, a groundbreaking protocol aimed at integrating Bitcoin-native decentralized finance (DeFi) capabilities into the Cardano ecosystem for the first time. This announcement was made in a post on X on June 9, 2025.
Welcome to the first Bitcoin DeFi protocol developed for Cardano https://t.co/CoYvrYnIfI
— Charles Hoskinson (@IOHK_Charles) June 9, 2025
With this development, users will now have the opportunity to utilize Bitcoin’s liquidity while benefiting from the enhanced smart contract functionalities and lower transaction fees that Cardano offers.
Non-Custodial, Cross-Chain DeFi with Bitcoin at the Core
Cardinal, which was revealed this week, presents a trust-minimized approach to wrapping Bitcoin (BTC) without needing centralized custodians or federated systems—an ongoing topic of discussion within the crypto industry.
“Wrapped BTC today comes with tradeoffs,” noted Romain Pellerin, CTO at InputOutputHK. “Custodians. Federations. Risk. Cardinal flips the model.”
At its heart, Cardinal features a novel capability that enables users to wrap any BTC unspent transaction output (UTXO) for various DeFi applications, including lending, borrowing, and staking.
The protocol ensures that Bitcoin remains securely locked under MuSig2 aggregated multisignature schemes, while a wrapped UTXO is minted across chains, remaining redeemable at any moment through a fraud-proofed peg-out system.
“No rehypothecation. No compromise,” emphasized Pellerin, underscoring the protocol’s commitment to security and transparency.
Cardinal is built on a framework that combines Bitcoin Hash Time-Locked Contracts (HTLCs), Cardano smart contracts, and BitVMX for verifiable off-chain execution. It is designed to be interoperable with any smart Layer 1 blockchain, not just Cardano, and introduces the first trust-minimized Ordinal bridge from Bitcoin directly to Cardano’s mainnet.
“Ordinals can now be used in DeFi, serve as collateral, be auctioned across chains, and borrow or lend value without losing provenance,” Pellerin explained.
The protocol facilitates the creation of wrapped assets—ranging from NFTs to tokens—that are natively pegged at a 1:1 ratio, allowing for on-chain transferability and the option to burn them to retrieve BTC or Ordinals.
By launching Cardinal, Cardano is positioning itself as a formidable player in cross-chain DeFi, integrating Bitcoin’s value and security within the programmable framework of smart contracts while adhering to the trustless ethos of Bitcoin.
A Strategic Play in the Multi-Chain DeFi Arena
The launch of Cardinal arrives during a time of increasing demand for decentralized, trustless alternatives to traditional financial systems. With several high-profile collapses of custodial platforms in recent memory, protocols like Cardinal are gaining traction by bringing Bitcoin into the DeFi space while upholding its foundational principles.
Analysts believe this initiative could enhance Cardano’s competitive stance in the multi-chain DeFi arena, particularly as Ethereum continues to experience high gas fees and Bitcoin remains limited in programmability.
Furthermore, Cardano’s strengths in formal verification and academic foundations could attract developers seeking a secure platform for cross-chain applications.
Cardano Price Prediction
As of late, Cardano (ADA) has experienced a nearly 16% decline over the past month, mirroring a broader crypto market downturn exacerbated by escalating trade tensions between the United States and China, according to Alejandro Arrieche from Finance Newso.
Investor sentiment has also turned cautious, as illustrated by the Fear and Greed Index, which has slipped from a recent high of 76 (Greed) to 55 at the time of reporting, indicating a more wary outlook amongst traders in this uncertain market climate.
The price predictions for Cardano hover around the $0.66 mark, a significant accumulation zone that ADA quickly re-established after previously breaking down in the bearish trend.
The post Charles Hoskinson Unveils Cardinal, Unlocking Bitcoin Liquidity for Cardano DeFi appeared first on Finance Newso.
