Cardano, via its development arm Input Output Global (IOG), officially launched the Cardinal protocol on June 9, marking its first effort to integrate Bitcoin liquidity into its decentralized finance ecosystem.

This launch represents a significant strategic pivot for Cardano, enabling Bitcoin holders to engage in lending, borrowing, staking, and other DeFi activities on Cardano—without relying on centralized custodial or federated bridges.

At its core, Cardinal wraps Bitcoin unspent transaction outputs (UTXOs) and converts them into transferable tokens pegged 1:1 to the original BTC. This process is secured with MuSig2 multi-signature cryptography, requiring a trust-minimized model where only a single honest operator among many is needed to maintain security.

Additionally, Cardinal incorporates BitVMX, an off-chain computation layer that supports complex Bitcoin script execution—enabling programmable DeFi interactions while avoiding central points of failure.

Rather than depend on traditional bridged models prone to fraud or custodial control, Cardinal operates under a trust-minimized architecture that imposes a confirmation-based relay mechanism. Wrapped tokens can be redeemed and burned at any time, returning the underlying Bitcoin to the original chain—adding transparency and security to cross-chain asset movement.

Despite this groundbreaking deployment, IOG emphasizes that Cardinal is not yet production-ready. Roman Pellerin, Cardano’s CTO, advised stakeholders that further improvements are…