Building new applications on Bitcoin thereby allows the consequent applications – whether they are facilitating digital assets, decentralized finance (DeFi) or decentralized autonomous organizations (DAO) – to benefit from Bitcoin’s network effects, all while fueling further adoption of sound money. BTC’s liquidity, the highest of any cryptocurrency including ether (ETH), is particularly critical in decentralized finance, which runs on liquidity pools. The greater amount of liquidity a protocol has, the better suited it is to power financial use cases.
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