- Cardano launches Cardinal Protocol, enabling BTC use in DeFi without bridges.
- ADA’s price surges as Cardinal adoption grows across major Cardano DeFi platforms.
- Cardinal ensures secure, non-custodial BTC staking and lending.
Cardano has taken a major leap in the decentralized finance world with the launch of its first Bitcoin DeFi protocol, Cardinal, triggering a sharp rise in the price and trading volume of ADA.
The Bitcoin DeFi protocol was first unveiled by Charles Hoskinson, the founder of Cardano, during the Bitcoin 2025 conference, where a live demo showcased a bridgeless BTC-to-Cardano transaction using the new system. The protocol is now live.
Cardano founder Charles Hoskinson has announced the launch of Cardinal, the first Bitcoin DeFi protocol on the Cardano network. The protocol leverages MuSig2 multi-signature technology to enable non-custodial cross-chain functionality, allowing users to directly use Bitcoin UTXOs…
— Wu Blockchain (@WuBlockchain) June 10, 2025
The news quickly rippled through the market, lifting ADA’s price by nearly 4% within 24 hours and pushing its trading volume to over $700 million, according to DefiLlama and market tracking data.
Adding fuel to ADA’s bullish momentum is its recent inclusion in the Nasdaq cryptocurrency index, something that is driving institutional interest.
Cardinal brings Bitcoin to Cardano’s DeFi ecosystem
For the first time, Bitcoin holders can now access decentralized finance services on Cardano without going through centralized custodians or third-party bridges.
Developed by Input Output (IOHK), Cardinal wraps Bitcoin’s unspent transaction outputs (UTXOs) into pegged tokens that users can stake, lend, or borrow while retaining full control over their assets.
The protocol employs the MuSig2 multi-signature scheme to handle peg-in and peg-out processes securely, ensuring the original Bitcoin remains locked on its native blockchain.
Because of this trust-minimized design, Cardinal is seen as a major innovation compared to traditional wrapped Bitcoin solutions that depend heavily on custodial infrastructure.
Wrapped UTXOs and cross-chain compatibility
What sets Cardinal apart is its ability to handle Wrapped UTXOs in a manner that remains transparent and secure while offering flexibility in how users reclaim their native Bitcoin or Ordinals.
These wrapped tokens are not only pegged 1:1 with BTC, but they can also be burned at any time by users to retrieve their original assets through a verifiable process.
Cardinal also uses BitVMX, an off-chain execution system, to bridge Bitcoin’s scripting limitations and enable interactions with Cardano’s smart contracts.
Furthermore, this approach facilitates compatibility with other blockchains such as Ethereum, Solana, and Avalanche, expanding the reach of Bitcoin within multi-chain DeFi environments.
Cardano DeFi platforms are already adopting Cardinal
Major Cardano-based DeFi platforms including MinswapDEX, SundaeSwap, and Fluid Tokens have already integrated Cardinal, giving users the ability to farm, lend, and trade Bitcoin-linked assets directly.
With this integration, Bitcoin can now be used as collateral, traded for other native tokens, or even employed in NFT and Ordinal markets without compromising security or history.
Technical director Romain Pellerin emphasized that while Cardinal is already transformative, future upgrades will focus on wallet integration, zero-knowledge proofs, and increased liquidity.
These enhancements are expected to deepen the protocol’s appeal and strengthen Cardano’s position in the broader DeFi landscape.
