Building DeFi on Bitcoin: Unlocking Layer 2 interoperability with Persistence
Bitcoin was never designed for DeFi — but the world is building it anyway.
In this episode of Web3 with Sam Kamani, I spoke with Jeroen Develter, Head of Growth at Persistence, to unpack how Bitcoin is quietly becoming more composable, interoperable, and DeFi-enabled than most people realize.
For years, Bitcoin has remained somewhat isolated from the broader innovation in decentralized finance. But that’s starting to change, thanks to a new wave of Layer 2 (L2) protocols and cross-chain infrastructure.
The case for Bitcoin Layer 2s
Bitcoin’s security and decentralization are unmatched — but its programmability is limited. Layer 2 solutions are emerging to bridge this gap. They aim to bring scalable, smart contract-like functionality to Bitcoin without compromising its core principles.
Jeroen explains that while Ethereum has long dominated the DeFi conversation, Bitcoin’s size and network effects make it an ideal candidate for unlocking new financial use cases — if we can solve for fragmentation and interoperability.
What Persistence is building
Persistence is tackling this fragmentation head-on by introducing an intent-based architecture — a framework that allows users to express what they want to achieve (an "intent") without worrying about the how.
This simplifies the user journey, removes friction across chains, and enables composable DeFi actions, even when interacting with different ecosystems.
Here’s what makes it interesting:
- Intent-based design: Users declare high-level goals (e.g., “stake BTC for yield”) while Persistence handles execution paths.
- Cross-chain infrastructure: The Persistence stack supports seamless interaction between Bitcoin and other L2s or chains, like Cosmos or Ethereum.
- DEX built for Bitcoin: They’re developing a decentralized exchange tailored to Bitcoin-based assets and wrapped tokens, something the Bitcoin ecosystem has largely lacked.
The rise of Bitcoin staking
One major innovation is Bitcoin staking — not native staking like on PoS chains, but synthetic mechanisms that allow BTC holders to earn yield via wrapped assets or L2 staking protocols.
As Jeroen notes, the appetite for this is growing, especially as more users seek alternatives to holding idle BTC.
However, this comes with challenges:
- Security assumptions across chains vary.
- Wrapped assets require trust in bridge providers.
- Education and UX are still barriers.
Persistence addresses these through clear routing, safe protocols, and abstraction layers that protect users from complex decision-making.
What makes Persistence different?
Jeroen candidly shares the challenges of navigating a space that’s evolving in real time. From managing tradeoffs between decentralization and usability to building trust in cross-chain systems, there’s no shortage of complexity.
Yet, Persistence differentiates itself by:
- Prioritizing UX with intent-based actions.
- Building a Bitcoin-native DEX rather than retrofitting Ethereum tooling.
- Integrating with multiple ecosystems instead of betting on a single winner.
Future roadmap and advice for founders
Looking ahead, Persistence will focus on expanding protocol integrations and growing its staking and liquidity layers for BTC.
Jeroen also offers advice for builders: Don’t be afraid to pivot. Persistence originally focused on Cosmos-based assets but saw the market shift and embraced Bitcoin as a core focus.
This ability to adapt — while keeping the user experience central — is key to surviving and thriving in crypto.
final thoughts
Bitcoin DeFi isn’t just a niche trend — it’s a signal that users want more from the assets they already trust. With Layer 2s gaining traction and platforms like Persistence making that future more accessible, we could be entering a new era where Bitcoin plays a bigger role in the open financial stack.
And as Jeroen puts it, simplifying the user experience is the real unlock.
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