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BTCFi Complete Breakdown: Rubic X Hemi Podcast
Recorded: Aug. 19, 2025 Duration: 0:39:09Space Recording
Short Summary
In a recent podcast, industry experts discussed the transformative potential of Bitcoin in decentralized finance (DeFi), emphasizing the growing trend of integrating Bitcoin into DeFi protocols. With over $100 billion in institutional capital flowing into Bitcoin ETFs, the conversation highlighted innovative yield opportunities and the importance of user experience in driving adoption. As hedge funds and family offices lead the charge, the convergence of traditional finance and crypto is set to reshape the financial landscape.
Full Transcription
okay Thank you. so Thank you. Thank you. Thank you. so
E aí Thank you. E aí Hi everyone!
We are starting the first podcast at Rubik by Kemi. uh by hemi so we have here rangel wash who is the lead of ecosystem in hemi and uh the ex
employee of mantle algorand and polygon so uh thank you Pranjal for joining us.
Hey everyone.
Hi Igor, how are you?
I'm fine. How about you?
Where are you now?
Awesome.
So I'm currently
in Delhi, in India, visiting my parents.
I was just
in Vietnam attending
Vietnam and GM Vietnam you know speaking and interacting with a lot of Vietnam
based builders and projects really good vibes yeah what about you amazing amazing i'm still in cincerely in katania so nothing new nothing but it's still sunny
awesome so um the theme of today's podcast is btc finance complete breakdown and uh if you've
been in defy since 2020 but never touched Bitcoin DeFi, this episode is for you.
Because right now, for the first time, Bitcoin isn't just sitting in cold storage or getting wrapped on Ethereum.
It's entering real DeFi.
And HEMI, blockchain is in the center of this evolution of Bitcoin.
And we'll gather what BTC Finance actually is. that's in the center of this evolution of Bitcoin.
And we'll cover what BTC Finance actually is, why it's not just robbed Bitcoin with extra steps
and why 2025 might finally be the year of Bitcoin,
where Bitcoin becomes productive capital. And we'll also break down the biggest misconceptions that cost DeFi users money,
the risks you need to understand, and the opportunities that only HEMI unlocks for Bitcoin holders.
From earning yields on native BTC to Compasibility without giving up security.
To the big question of what happens when institutions finally step into BTC finance.
We'll go through all of it.
And so if you are a Bitcoiner who's been watching DeFi from the sidelines or a DeFi user who's been ignoring Bitcoin,
this is the episode that connects both worlds let's get
started pranjal um for someone who's been in defy since 2020 uh what's the 30 second pitch
on why btc finance matters now yeah i think uh if someone has been in d5 since 2020 um i think the biggest
reality check is that uh most likely they will they would have been farming yields um and different
d5 opportunities on on ethereum but uh they are still on the sidelines when it comes to considering the world's biggest asset and the most liquid crypto asset.
BTC5 is not just the DeFi that exists for Bitcoin, but it's also about unlocking a huge capital which sits in Bitcoin at the moment I think you
know could be north of like more than a trillion dollars it has been sitting
dormant where people are just earning capital gains of course on the on the
price of Bitcoin but it's been sitting idle in their wallets. So I think it's finally time that people, you know, make that money to work, make that Bitcoin to work. Even just taking
example of a current market condition at the moment, like all of us have seen that
while other cryptocurrencies struggle, while, you know, ETH was struggling for the longest time,
Bitcoin was continuing to grow. And the dominance between ETH and Bitcoin gave us a clear other cryptocurrencies struggle while you know eth was struggling for the longest time bitcoin was
continuing to grow and uh the dominance between eth and bitcoin gave us a clear picture of you
know by why bitcoin matters in the long term so uh i believe you know we as as hemi we believe that
bitcoin is here here to grow is here to stay and it will be the largest asset and it will continue
be the it will continue to be the largest
asset in the long term. And that's why we have, you know, doubled down and we have created a
super network where, you know, it's not just about Bitcoin. It's about the good things of Bitcoin,
good things of Ethereum. And we are connecting these different components rather than considering
them in a competitive way and, them as a combating chains.
That means that Bitcoin holders can finally unyield
and they can move from traditional DeFi to Bitcoin DeFi
with superior sort of like yield opportunities.
Yeah, I see. Thank you.
Yeah, yeah, yeah, I see. Thank you. You know, like back in the day, there was a stereotype that Bitcoin is just there. The way to hold, but not the way to earn on to builds or to do anything else like NFTs. And what are the biggest misconceptions DeFi users might have about B2C finance?
You know, like back in the day,
the biggest misconception DeFi users might have about B2C Finance?
Yeah, absolutely.
I think the way Bitcoin has evolved over the years, rightly, as you said, there could be
a misconception about this.
So I look at it in different growth stages of Bitcoin itself.
I would say the first initial few years, like five to seven years,
is more about building the Bitcoin chain itself,
where a lot of core developers,
including one of our founders, Jeff Karzik,
he was one of the first core developers on Bitcoin,
worked closely with Satoshi.
These guys were working hard
on the programmability side of Bitcoin,
just building the initial foundation steps
where they were introducing NFTs,
some grassroots level DeFi techniques and so on.
So I believe those were like the initial building years.
Then we moved on to an experimental era,
which I think is soon to end,
where we are seeing more NFTs marketplaces staking restaking protocols
come in and yeah ever since 2024 we have seen huge institutional interest come in into the space
because even institutions are starting to recognize the utility of Bitcoin as an asset
so everyone is pretty much interested in understanding and recognizing
the utility of Bitcoin as an asset in this given phase. They want to own, borrow, lend,
all of this on Bitcoin. So yeah, I think we are going from a place of knowledge to discovery,
where we have seen some of the stuff happen in a similar way on Ethereum. And a place of knowledge to discovery where we have seen some of the stuff happen
in a similar way on Ethereum and a lot of the chains are trying to compete in that space where
they are trying to replicate that for Ethereum. Yeah, everyone knows, thank you, and everyone
knows the world of BTC and explain in a nutshell why BTC finance on HEMI is fundamentally
different from just bridging Bitcoin to Ethereum. Yeah, sure. So basically with the wrapped BTC,
of course, the custodian right here is Bitco. When you are interacting with RAPBTC,
you are trusting Bitco with your money.
You know, you are still, let's say,
participating in Ethereum.
So there are always cash fees involved.
There's going to be Ethereum smart contract risk and so on.
So in terms of Bitcoin,
as we see more LSTLRTs come into the picture,
there's always a risk with some of the LSTLRTs and their underlying proof reserves.
And there has been a bunch of exposures on this, like if a certain chain or a certain protocol is claiming to have X number of reserves against X number of native Bitcoin assets? Do they actually have that in place?
But what's different than HEMI is that with our HEMI BTC asset, it's a way for people to basically mint this particular asset,
as I said, HEMI BTC, with their native BTCs.
And it's held in an over-collateralized multi-seg wallet.
So I think in the long run, it will be more trustless
in terms of competing with BitVM or any such other technologies,
and it can be done with our tunnel, with our bridge.
So you don't have to just rely on a RAP BTC or native BTC.
It just gives you another way to interact with most of the DeFi protocols, which currently sit on HEMIC.
Yeah, thank you.
Sounds very complex and very useful for the industry.
But why it took so long to build such a complex and useful protocols and chains?
Like why specifically this year is called like the year of BTC Finance when we've been
all hearing this story since like 2017-18?
Yeah, I think it's more about, as I said previously, it's more about the institutional growth and the way the Bitcoin ETFs were listed.
I think the whole sort of dynamics of the industry changed at that part of time in 2024.
The Bitcoin was around, there were like a few Bitcoin layer 2s, there were a few sidech chains who are trying to scale bitcoin chain itself
but i would say ever since black rock has listed the etfs there's a huge interest in
just investing in bitcoin and that's one of the ways where you know people can invest in bitcoin
without having the underlying risk so uh yes firstly etfs bought bought in more than $100 billion in institutional capital.
And now, once the capital is there, I think everyone will be looking to earn yield on top of it beyond just holding that.
Of course, there are a lot of challenges.
We can probably talk more about that later on.
Like what's maybe holding them back from just putting all of that money from the etf into d5 directly
um but yes uh you know with hemi we are trying to build a underlying architecture um by which
these security challenges these risk challenges can be solved um and then eventually uh you know
that gap has always been infrastructure and you know we are trying to bridge that yeah
now it's more or less clear so you could say that you see the the potential with the Tradify.
But if it's so, what is the main struggle for crypto,
which for crypto company,
which would like to work with Tradify
and how do you see the convergence in the future?
So can you just repeat the question?
I got the connection issue in the middle.
Yeah, no problem. How do you see the convergence of Tradify and crypto and what are the main BTC Finance striving now in working with Tradify.
Yeah, yeah, definitely. So I think it's more about, as I said, it's more about the infrastructure side of things as we
move towards the the part where there's a fundamental shift between the lines of
centralized and decentralized finance you know even we are positioned at right
at this intersection you know where you can see the institutions trying to find decentralized venues, but also people who are the biggest believers and supporters of Bitcoin, they are always interested in not trusting a centralized entity and moving towards a decentralized entity and maybe perhaps more towards a decentralized sort of architecture or infrastructure.
Could be for the chain, could be for the protocol itself where they are sort of interested in this.
But like for example, if you were to talk about wrapped Bitcoin, there can be various attack vectors.
There could be, because there are multiple players in the picture,
there could be the custodians, there are the smart contracts,
there are the validators, and the DeFi protocols.
All of these can be a risk factor for you if you were to invest in this.
But I think it's more about all of them coming together,
work on the security side of things.
Rubik as well, I think you're bridging the gap
between for the end users to find the best places
for people to just find and deploy their capital
and move between different chains.
The interoperability issue is being solved over there.
So once we have these sort of trust assumptions uh
in place uh we will see the uh there will be a centralized uh custodian layer which you know
is trustworthy where you know there are not enough risks and then we will see uh you know much better
instruments sort of come in and institutions also also trusting it and then users will follow to that. So everything comes to trust. Tradify and
the institution have to trust crypto and that's the main points according to you.
Yeah. Okay and thank you but let's be real, what are the three biggest problems still holding BTC Finance back at the moment?
Yeah, I think a few more problems that just come to my mind because we interact with users every single day,
we interact with different LPs on a regular basis.
different LPs on a regular basis.
We see, firstly, it's about the user experience itself
on some of these dApps or some of these protocols.
There are multiple wallets people are using.
There are different wallets on the EVM side again,
different wallets on Solana,
wallets on Solana, different wallets on different chains, and then there are different wallets for
different wallets on different chains,
and then there are different wallets for Bitcoin.
Bitcoin. So the process of using this state where you have multiple wallets, multiple funds
lying around in different places, the bridging process is complex a lot of times. And even the
wrapped token mechanics itself is very different from entity to entity or custodian to custodian you know
so that is definitely one of the one of the biggest challenges if you know a lot of people
are building in this space and i think that will go a long way in terms of making it easier to
onboard users secondly the liquidity itself is very fragmented we have a bunch of layer twos you know hemi of course is also a layer
two uh we are competing for a limited number of bitcoins um so uh in the bigger picture yes you
know this could be an issue where you know uh all of us have this liquidity sort of spread um
in different pools different places different protocols, which would actually solve a lot of issues
if it was concentrated in one place.
But that is very hard to achieve.
So I think we'll have to work in a way where
this fragmented liquidity is available
for different layers to sort of access.
I think that would be a huge unlock.
And lastly, I think, you know,
as we've been talking about the trust
and the security perception of it,
you know, some of the early Bitcoiners
are still skeptical about, you know,
newer protocols coming up,
which can get exploited.
And I think that that's going to take time.
And, you know, more builders have to sort of come into the space.
Once institutions are into the space, that's when you know that there is an institutional grade security on top of some of these protocols.
So that's when users will also follow with their deposits and their Bitcoin holdings.
So these would be the main three problems I see.
Thank you. And Hemi is addressing all of them. But can you give me three things?
I, as a user, can do on Hemi today that I can't do anywhere else with the native Bitcoin?
Yeah, definitely. So, and I would actually like to just give a small introduction about hemi itself so that people understand you know what's the core difference
um so hemi is a layer two where we are trying to bring in best of both the balls both of what
ethereum and bitcoin has to offer um and we are doing this by running a bitcoin full node inside of the evm or gets
so that basically uh offers a user to eventually index a transaction or maybe just you can say like
access a state on both ethereum and bitcoin side of things um that gives you a lot of advantages
uh on ethereum side that gives you scalability that gives you fast transactions that gives you a lot of advantages on Ethereum side. That gives you scalability.
That gives you fast transactions.
That gives you low gas fees and faster finality.
But on the Bitcoin side of things, as Bitcoin has been known for being so secure,
there is that security aspect on our chain itself.
So that are some of the advantages that, you know,
we are trying to get both of Ethereum and Bitcoin.
In terms of, you know, what people can do right now,
which, you know, which sets us apart, as I said,
you know, firstly, our asset, HemiBTC,
which is a wrapped version of BTC,
is backed one-to-one in a over-collateralized way.
Of course, held in multi-sex, we are not like some of the other shady protocols.
And, you know, could be different chains where you can't really trust them with proof of reserves. I feel there's a lot more trust between users and people
where they can take advantage of the security model
and they can provide liquidity,
they can stake Hemi BTC,
benefiting from our proof-of-proof consensus mechanism.
Secondly, I would say we are running the points program.
We are running a lot of incentives. it's it's it's a way for
people not only to ungeal on their bitcoin but also to earn a lot of these uh incentives and
point boosters on on on hemi btc for example if you were to deposit that into a liquidity pool
you would get a you know a superior uh point, like an eight times multiplier or five times multiplier.
Even on Mokul, we are running a lot of campaigns where we are
seeing great results coming in because people are
interested in earning daily rewards in USDT, USDCs.
So it's just another way for people to participate in DeFi,
and then on incentives on top of it yeah
thank you but anyway um can you give me some kind of advice uh for a bitcoin holder with one btc
for a bitcoin holder with one btc what's the optimal strategy to start earning on hemi
the one who has one btc yeah yeah yeah definitely so if someone were to start with one bitcoin as uh
as a way for them to test waters on you know what they can do with their bitcoin while um they were to say come to HEMI or and just you know just to
test some of these things I would always
advise them to firstly
use a fraction of their capital let's say
you know a 0.1
BTC where
they can tunnel it to HEMI
convert it to HEMI BTC
and they can begin with some of the
safer strategies I really like what Spectra has been building on top of HEMI BTC and they can begin with some of the safest strategies. I really like what
Spectra has been building on top of HEMI. So I would advise users to sort of utilize the Spectra
vault which is currently yielding about 10.5 percent and there's close to about 18 million
dollars in liquidity over there on that pool and basically uh basically spectra will uh supports uh different
way of earning yields there are the fixed rate that follows with the with the principal tokens
or you can say the pt tokens uh which lock in for a fixed return uh hemi users basically pay up front
uh and they will wait for the majority of it usually it's like 90 days and they can redeem it for the original amount and uh uh yield on top of it um and then there is the the yield leverage tool where you know it
it increases the exposure itself like with uh just a 0.1 btc position they can on uh yield and points
and other incentives uh to up to 3.5 times 3.5 BTCs,
which is like 35X yield leverage.
And that is only for on a fraction of their holding.
So so he may be supporting the PT and YT tokens through
spectra. I think it's a huge unlock and could be a fun way
for new beginners to sort of tap into this now
because it's not really a complex process for anyone.
You know, it's like a few clicks and you can just make a deposit
and you can always see the breakdowns
and you can always track the positions later on.
So the supplying part of it, it's not really complex for anyone who's just starting now.
Okay, sounds very appealing.
So thank you for the advice.
And let's come back to Tradify topic because we see high potential in Tradify.
in Tradeify and I think that BTC Finance will be the biggest part of intersection of Tradeify
and DeFi and how do you think which type of institutions will adopt BTC Finance first will
it be hedge funds, family offices, corporate traders, maybe ne now banks because we try to work with neobanks now
yeah yeah yeah so i think uh hedge funds are already leading the wave of adoption uh for
most part in in uh bdc5 they are uh they are definitely the ones who understand the alpha
uh and the opportunity right now in the space um even
with us and interacting with different lps in the last six months i've seen
uh of course as a as a chain itself we have seen a huge surge in tvl but uh with uh with
interaction to some of the sophisticated lps i've uh i've understood that they recognize the
I've understood that they recognize the offerings of a product like Hemi BTC and what sort of alpha and opportunity it has to offer.
So some of these LPs and headphones, I would say, are definitely the ones who are leading this way. be uh you know family offices or larger size um uh holders or you know rwa holders who would be
interested in uh bringing um different sort of assets on chain you know could be could be
something rwa related where we can see more of gold come on chain you know through uh paxos or or any other RWA-based, precious metal-based RWA.
And then I think eventually we will see the corporates,
the big players like MicroStrategy,
who is currently holding a lot of Bitcoins.
They will eventually need the architecture
and they will need an ecosystem to participate in DeFi.
And that's when they're going to do their due diligence. That's when they're gonna they're gonna do their due
diligence that's when they're gonna demand for a security layer where they can participate in
DeFi and on yield on their billions and billions of dollars of holdings in Bitcoin and how about
neobanks do you have any insights on how DeFi could target the banks which need to use crypto, which has the idea to use crypto?
And like generally, how would you work with them?
Yeah, I think with the banks, it's a bit of a challenge for them because most of the banks operate in a given jurisdiction
and could be very tied down because of a geographical restriction.
So there could be different rules.
There could be different regulations that they have to take care of.
So even if they are accepting Bitcoin deposits from users,
I'm not sure how openly they can sort of participate in DeFi or BTC DeFi with that.
But even understanding that point, I think adopting stable coins will be the biggest unlock for them,
where people don't have to rely on the currencies and the US dollar, which is the biggest currency out there,
which is also offering as a currency which is pegged against a lot of different currencies
in different countries. People don't have to rely on that eventually, and they will have
power to sort of work with different CBDCs and decentralized, yet decentralized currencies
in different parts of the world.
So I think for a lot of banks,
that would be a huge unlock.
And we are starting to see that in some of the countries.
But if you have more insights,
I'm happy to learn more about that.
I think, but yeah, in my opinion,
I think stable coins is going to be a huge unlock
and then they'll slowly move on to
bitcoin thanks um it's a nice idea about starting with stable coins because obviously it's it's easier to understand for retail users of their banks what is stable coin and then start from this
with a stake and maybe so and what's preventing blackrock from
putting their bitcoin etf holings into hemi into btc finance yeah yeah yeah so yeah i mean as we
were talking about this um i think there are uh two or three main uh. Firstly, as I said about the regulations of it,
the regulatory approvals,
the ETF prospectors and the way it's set up.
It restricts BlackRock from using it
in different holding strategies
or like any sort of like short-term or long-term strategy.
And then there's a fiduciary duty part of it
where there are concerns around the smart contract risks
and the risk of the underlying tech being at fault
for any of the user holding going bust tomorrow.
So I think that they are being very careful in that way uh and um uh
even the regulations are being set up in that way where users feel comfortable sort of investing in
atf at the moment uh and you know they don't want their the extra exposure right now but you know
since um i i think eventually they will realize that they are also losing on the yields,
which are just out there, which could easily be attained by putting the capital,
maybe a small fraction of it, but yeah, putting it to work somewhere else.
And then lastly, as I said, the security infrastructure of it,
the BlackRock's current financial infrastructure is not really built for DeFi.
It's centralized finance.
So eventually they will be reaching out to,
these sort of institutions
will be reaching out to
chains and ecosystem
who have this infrastructure
and the security side of things figured out.
And then I think a lot of these players, even, you know, Hemi,
will probably be able to offer a custom sort of compliance requirement
based on whatever the requirements or the jurisdiction says.
We'll be able to sort of provide that in a wide-close service to them.
And that's when we'll see uh
players like blackrock and other big institutions uh take part in d5 yeah hopefully hemi will be in
the center of all of these upcoming things and uh thank you pranjal for joining us thank you
joining us thank you kami team for for providing us with uh these insights and um thanks everyone
uh for listening i think uh that that's it for today episode uh but our goal here is simple uh
to cut through the noise and bring you clear insights on where defy is really heading in the next episodes we'll go
even deeper into the tools and strategies that can make your quick to work harder for you and stay
tuned this is just the beginning and um thank you everyone for your time and i wish you a good day
everyone for your time and i wish you a good day
awesome thanks thanks a lot for having me if uh you know you want to learn more about uh about
bitcoin uh yields or uh what's going on what's been the latest uh in in the space or what's
what's the latest with hemi uh feel free to reach out to me and uh on twitter using dms and yeah
Hemi, feel free to reach out to me on Twitter using DMs.
And I hope, and I'm going to be a listener of the series as well,
just to learn more about what sort of infrastructure is coming along
as this new wave of BTC5 emerges. Thank you. Yeah, over to you, Jagar, if you have any closing thoughts.
If you want to wrap it up.
Yep. Thank you.
