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MonkeDAO Adopts Bitcoin Reserve Through zBTC on Solana

MonkeDAO, a community-driven non-fungible token (NFT) project operating on the Solana blockchain, has officially become the first decentralized autonomous organization (DAO) to integrate a Bitcoin reserve into its treasury strategy. This development marks a significant step in bridging Bitcoin and decentralized finance (DeFi) ecosystems.

What Is zBTC?

The reserve strategy is built around the newly-launched zBTC, a token native to Solana that is pegged 1:1 to Bitcoin. Unlike wrapped or bridged Bitcoin, zBTC operates in a permissionless manner, enabling holders to engage in DeFi activities directly on Solana’s blockchain. This includes lending, borrowing, and yield farming opportunities.

MonkeDAO’s Strategic Move

MonkeDAO announced the acquisition of 1 zBTC token on March 28, adding it to its treasury under the Strategic Monke Reserve (SMR). The SMR is the DAO’s treasury reserve initiative designed to foster long-term financial sustainability for its community. This integration aligns MonkeDAO’s commitment to supporting a permissionless ecosystem for Bitcoin DeFi, often referred to as BTCFi.

“The SMR is our commitment to long-term growth, and the addition of zBTC diversifies and strengthens our current pool of native assets,” MonkeDAO shared on social media.

Benefits of zBTC and Bitcoin DeFi

The adoption of zBTC brings notable advantages to MonkeDAO and the broader Solana ecosystem:

  • Financial Diversification: Adding zBTC enhances MonkeDAO’s treasury portfolio by incorporating Bitcoin’s liquidity and stability.
  • Participation in BTCFi: zBTC unlocks opportunities for holders to engage in DeFi activities such as lending and yield farming on Solana.
  • Permissionless Operations: Unlike wrapped or bridged Bitcoin, zBTC operates without intermediaries, ensuring greater security and trustlessness.

How zBTC Works

zBTC achieves its 1:1 peg with Bitcoin through a trustless two-way peg mechanism. This is facilitated by a simple payment verification (SPV) sidechain and a decentralized validator set on the Zeus Network. These technical innovations ensure the token remains secure and scalable within the Solana ecosystem.

The Role of Zeus Network

Zeus Network plays a pivotal role in enabling Bitcoin’s integration into DeFi on Solana. By unlocking the “trillions in value” tied to Bitcoin’s liquidity, Zeus Network aims to provide new use cases for idle Bitcoin stored in wallets. The network validated its first Bitcoin transaction on Solana in December 2024, demonstrating its ability to bridge these two blockchain ecosystems effectively.

Growing Confidence in Bitcoin

While MonkeDAO’s Bitcoin reserve strategy may not rival the scale of MicroStrategy’s Bitcoin acquisition efforts, it reflects the growing confidence in Bitcoin as a valuable asset for treasury diversification. With this move, MonkeDAO highlights the potential for BTCFi to expand Bitcoin’s utility beyond being a store of value.

As the crypto space continues to evolve, initiatives like MonkeDAO’s adoption of zBTC showcase the increasing synergy between Bitcoin and DeFi platforms, paving the way for innovative financial solutions across blockchain ecosystems.

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