DeFi vs Bitcoin

Composability is the main feature of DeFi. It allows you to interact with a large number of protocols in endless combinations, building your own trading strategies or discovering new ways of passive income without a minimum (and sometimes maximum) threshold for the amount of funds. 

Let's say we have free ETH, and we are puzzled by the question of where we can invest it to earn in double digits. First, we put ETH up as collateral in MakerDAO (a protocol that allows you to create an algorithmic DAI stablecoin) and actually get our stablecoin. Then we can put it into one of the Curve pools (Curve is one of the popular DEX's for stablecoins), for which we get LP tokens that show what position we own. Then we put these LP tokens into Curve Gauge (a protocol that rewards liquidity providers with different tokens such as CRV) and then we exchange these CRV tokens back for ETH. This way we make money on a fairly passive strategy that can be automated. 

At first glance, it seems like an incomprehensible interaction between different protocols, but this strategy was one of the most popular for getting up to 60% APR a couple years ago. Now it's scary to imagine what combinations of interactions occur between different protocols. 

After the emergence of such strategies, yield protocols like Yearn started to appear, which track and add different strategies for a large number of tokens. However, they also give you LP tokens for participating in their strategies, which can also be shared or put somewhere. Sometimes it seems like a vicious circle. 

As a result, you can build different ways of generating income in “bricks”, where each brick will be a different protocol that offers additional income and rewards for participating in its life. Hence the name.

This feature is present in all networks that have smart contract technology. But unfortunately, the main cryptocurrency does not support their creation and use, so it is deprived of one of the coolest chips DeFi. One temporary solution to this problem is to create bridges that try their best to move BTC from their ecosystem to more modern blockchains in order to increase capital efficiency for BTC holders. 

For example, the wBTC token is available on almost all popular networks and traded there on pair with other assets through decentralized applications. This allows a small fraction of users to use their Bitcoin 100%, but no network can fully provide security if almost all BTC tokens are transferred to another blockchain until the capitalization of a given network exceeds the bitcoin capitalization by several times.