The Bitcoin DeFi (BTCfi) space has seen a significant influx of players, each introducing versions of Bitcoin derivatives over recent years. Despite this growth, the sector faces a critical challenge: liquidity fragmentation among numerous Bitcoin variants (WBTC, cbBTC, sBTC, etc.). This issue is a significant barrier to BTCfi's development, as the complexity involved in swapping between different BTC variants contributes to a fragmented ecosystem.
BTCfi, composed of many Layer 2 protocols, sidechains, lending platforms, and innovative yield-generating mechanisms, aims to enhance Bitcoin's scalability and programmability. Doing so enables the creation of decentralized financial applications on Bitcoin's robust security framework. This has led to a need for interoperability, as it would solve the complex environment for swapping BTC derivatives, hindering BTCfi's potential. Resolving this core issue could help the industry grow into an estimated market worth over $250 billion, similar to Ethereum's DeFi market share.
Focused on expanding the Bitcoin ecosystem and addressing liquidity fragmentation is Morningstar Ventures’ portfolio company Persistence One, a project building a BTCfi Liquidity Hub to unify liquidity across Bitcoin Layer 2s and BTC variants. By reducing liquidity fragmentation, Persistence establishes itself as the BTCfi Liquidity Hub. It enables fast, near zero-slippage swaps for its native token $XPRT and $ BTC-related assets on the Persistence DEX.
This month's review will cover Persistence, its recent closed beta testnet launch, various product features, its team, and more. The review will also end with an analysis of the project and outline its strengths and challenges.
What is Persistence - Products & Ecosystem
Persistence V1, Persistence’s flagship DEX, has been live for almost 2 years and has been built up as the center of BTCfi Liquidity. It continues to build liquidity for XPRT, BTC, and other BTCFi-related tokens (such as projects building on top of Babylon). Persistence V2, on the other hand, which will be connecting to V1, aims to address Bitcoin’s liquidity fragmentation by enabling fast and no-slippage cross-chain swaps for all BTC-related assets. This helps unify BTC liquidity and promotes greater ecosystem efficiency. This product aims to provide a seamless experience for users who exchange various BTC derivatives and related assets.
The core technology driving this innovation is "intents," which allow users to specify the desired outcome of a transaction without determining the execution path. This approach simplifies the trading process, differentiating it from traditional automated market maker (AMM) models. Persistence One's mission is to enhance the Bitcoin ecosystem by promoting interoperability and scalability.
Persistence as a project also aims to support a wider range of tokens, paving the way for more comprehensive decentralized finance (DeFi) applications, including integrating decentralized exchanges (DEXes) for any-to-any swaps.
Below is a full overview of Persistence's various product offerings:
Persistence V1: XPRT, BTC & BTCFi Swaps (Live)
- A decentralized exchange platform that enables efficient trading of $XPRT and $BTC-related assets.
- Users can provide liquidity and earn from swap fees and liquidity provider (LP) rewards.
- Serves as the main liquidity hub for the $XPRT token.
Persistence Core-1 Chain (Live - soon also secured by Bitcoin)
- The foundational infrastructure underpinning the Persistence ecosystem, built on the Cosmos Tech Stack.
- The chain has been running smoothly for approximately 4 years and will be one of the first Proof-of-Stake chains secured by Babylon Bitcoin Staking.
- Provides essential features for scalability, security, and interoperability across applications.
- Supports various tools and infrastructure, including wallets and explorers, for users to interact with the ecosystem.
Persistence V2: Bitcoin Cross-Chain Swaps (Coming Soon):
- The flagship product focused on providing fast, zero-slippage swaps for Bitcoin across Bitcoin Layer 2s.
- It is powered by intents, ensuring user-friendly and secure transactions.
- Addresses the fragmentation in the Bitcoin ecosystem created by the rapid growth of Layer 2 solutions.
By partnering and integrating its solution with various projects and tools within the Web3 space, such as MetaMask, BitLayer, and the BNB Chain, Persistence aims to establish itself as a primary gateway for cross-chain BTC swaps.
Closed Beta Testnet Launch
Persistence One recently completed a phased closed beta testnet to enhance the user experience and directly address initial feedback. This structured rollout enabled Persistence to manage rising user engagement effectively while iterating on the product based on user input. Each phase is designed to ensure the platform can handle increasingly larger volumes of users, ultimately leading to a more refined and robust interoperability solution in the BTCfi space.
Despite the launch being a closed beta, the team garnered over 5K users and ample feedback, leading to a better public open testnet experience.
Token Economy
$XPRT is the native staking token of the Persistence Core-1 chain, launched in April 2021. It is designed to support the development of a DeFi ecosystem by enabling innovative use cases that extend beyond traditional DeFi primitives. The token serves to bootstrap ecosystem applications, promote network adoption, and secure the core infrastructure through staking. Stakers of $XPRT also have the opportunity to participate in governance, influencing the direction and longevity of the network.
As Persistence DEX attracts assets from different ecosystems, the Persistence Core-1 chain is positioned as an inter-blockchain communication (IBC) hub, facilitating enhanced interoperability across the ecosystem. Through its liquidity-focused architecture, $XPRT also plays a key role in bootstrapping and incentivizing liquidity for BTCfi assets across the Persistence DEX.
Team
Tushar Aggarwal founded Persistence in 2019 and has built a team of 17 strong crypto-native professionals based in Europe, the Middle East, and Asia. The team is experienced in finance and has strong business acumen.
Apart from building Persistence, the team is heavily focused on creating more awareness for BTCfi with its podcast hosted by COO Jeroen Develter. They also have an extensive educational blog that covers their product updates and discusses the BTC ecosystem.
Analysis
Strengths:
- The total addressable market for BTCfi is estimated to reach $250B+ over the next decade, meaning there is a solid market opportunity for projects like Persistence to grow within the BTC ecosystem.
- Persistence addresses a crucial issue within BTCfi and the broader Web3 space: liquidity fragmentation. By unifying liquidity across Bitcoin Layer 2s, BTC BTC-related assets and enabling seamless BTC swaps, Persistence is positioned as the BTCfi Liquidity Hub, solving one of the ecosystem’s most pressing challenges.
- The Persistence team has already been building since 2019. The team has a strong background in Web3 and crypto and has shown strength throughout the difficult bear market conditions in 2022. Their community of solid projects and various integrations with top-tier Web3 projects is also a testament to their hard work and being a promising project.
Challenges:
- Other ecosystems, such as Ethereum and Solana, build stronger products faster than the BTC ecosystem, which is often considered slow. Furthermore, Bitcoin holders are less susceptible to adopting new technologies due to security concerns and the nature of “BTC Maxis.”
What’s Next for Persistence
Persistence is gearing up for a much greater push for visibility, focusing on expanding its presence within the BTCfi ecosystem. The team is set to introduce new assets to the Persistence DEX, broadening trading options across the Bitcoin ecosystem.
Additionally, Persistence One aims to leverage its Intent-based infrastructure to support cross-chain swaps for synthetic BTC, address key liquidity gaps, and enhance user accessibility in BTCfi.
Learn more about Persistence.
🌐 Official website: persistence.one/
🐦 Official Twitter: x.com/PersistenceOne
🕹️ Discord channel: discord.com/invite/vyvp3scWnH
📖 Telegram: https://t.me/persistenceone
✍️ Blog: blog.persistence.one
