Bitcoin Leads New DeFi Cycle as Slow Exit Mechanism Becomes Key
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 02 2026- Impact of Exit Friction: Bitcoin's transaction bottleneck creates high exit costs, leading to longer capital retention in protocols, which establishes conditions for sustained growth in DeFi games, highlighting Bitcoin's significance in the upcoming DeFi cycle.
- Limitations of Fast Chains: While chains like Solana and BSC can process 100 times more transactions than Ethereum in 2020, their instant exit mechanisms lead to rapid liquidity evaporation, making it difficult for DeFi projects to sustain, thus revealing the fragility of fast chains.
- Theory of Slow Finance: The Slow Finance thesis emphasizes that exit friction is crucial for maintaining DeFi cycles, as users opt not to exit under high fees, providing stability and attractiveness to protocols, which encourages continuous capital inflow.
- Emergence of New Protocols: New Bitcoin DEXs are utilizing single-sided BTC staking to avoid custody risks while leveraging Bitcoin's native mechanisms to create exit friction, indicating the potential for the next DeFi cycle.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
