Ilia Polosukhin Says NEAR Protocol Will Bring DeFi to Bitcoin and Other Chains Without Smart Contract Functionality

Ilia Polosukhin, co-founder of Near Protocol, has outlined an innovative approach for building cross-chain applications, particularly focusing on lending protocols. Speaking to CNBC’s MacKenzie Sigalos, he explained how Near’s smart contracts can manage Bitcoin addresses, allowing users to deposit their Bitcoins.

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Let’s say you want to build a lending protocol. And so, the idea is a NEAR smart contract will have Bitcoin addresses that as a user you can deposit your Bitcoins on.

Ilia Polosukhin

These addresses, controlled by the smart contracts, enable Near to manage when to release funds. This functionality facilitates borrowing in other cryptocurrencies, such as stablecoins or Solana, based on the assets deposited by users.

Polosukhin described a scenario where, if a user’s collateral value falls below a certain threshold, the smart contract can liquidate the Bitcoin to repay the loan.

NEAR smart contract is able to decide when to release these funds from this address.

Ilia Polosukhin

NEAR Opens Up Spaces for People To Build

Additionally, no matter what programming language you use, RUST, C++, JavaScript or else, Polosukhin said smart contracts can transact on Bitcoin as if it were a Near asset.

Moreover, he highlighted the broader implications of this technology, suggesting it enables the development of complex applications that operate across multiple blockchain networks, from Celestia to Bittensor, and from XRP to Cardano, among others.

Polosukhin stated that by connecting different blockchains together, Near Protocol makes it easier to build and use a wide range of decentralised finance (DeFi) applications.

And so that kind of opens up a really big environment for people to build really interesting applications that kind of span many chains at the same time.

Ilia Polosukhin

Access From one Entry Point and Defragmentation

The essence here is that money that would be sitting idle, say in BTC can now be “more productive” so to speak. Instead of your Bitcoin collecting virtual dust it can get to work across a range of DeFi applications – you could potentially buy other tokens, borrow funds out, buy NFTs and so on.

Polosukhin said it essentially consolidates everything and gives you exposure to new opportunities without having to create a new wallet for every ecosystem.

In a way it kind of aggregates liquidity across all of these [chains], especially for chains that don’t have smart contracts […] And you could just go and say, like, oh, I have some Bitcoin. I want to buy an NFT on Solana, click.

Ilia Polosukhin

Polosukhin added the goal is to “defragment the space and allow […] access [to] it from one entry point. “

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This will hopefully enable users to avoid having to remember in which wallet they have stored each coin or token.