The protocol’s launch marks Cardano’s most focused effort yet to bring Bitcoin liquidity into its ecosystem. By doing so, Cardano aims to unlock new opportunities for decentralized finance while offering Bitcoin holders safer ways to engage with emerging blockchain applications.
“The protocol works but as mentioned in the paper we don’t consider it production-ready yet. Some improvements are incoming. Stay tuned for 1.0 version.”
Cardinal marks a significant step in Cardano’s push to offer Bitcoin holders decentralized access to DeFi services such as lending, staking, and borrowing without relying on centralized bridges or custodians.
Instead, it introduces a more secure mechanism to wrap Bitcoin unspent transaction outputs (UTXOs), turning them into assets that can move freely across the Cardano network.
This system is built on a trust-minimized model, which assumes that at least one out of many operators behaves honestly.
Unlike federated models that require a majority of honest actors, Cardinal minimizes trust while maximizing decentralization. It also implements MuSig2, a multi-signature cryptographic protocol that lets multiple entities jointly sign a single transaction, enhancing security.
To address the risk of chain reorganizations or delayed finality in cross-chain operations, Cardinal waits for a set number of confirmations before executing critical steps. This approach reduces vulnerabilities and strengthens the integrity of asset transfers between Cardano and Bitcoin.
