The Bitcoin DeFi Flippening: Mr. Block (Curve) on Bitcoin L2s, Asia, and ETFs

In this episode of the Bullish on Bitcoin Show, BOB co-founder Alexei Zamyatin spoke with Mr. Block, one of the most recognizable voices in DeFi, especially in Asia. He has been in crypto since buying his first Bitcoin in 2012, started Mr. Block in 2017 to bridge the Western and Eastern crypto communities, and became a core member of Curve and Puffer. He also runs a YouTube channel that has produced more than 3,000 videos covering DeFi protocols from EigenLayer to Ethena, and was an active player in the Ordinals and BRC-20 boom. The conversation, recorded live as a Twitter Space, covered why Bitcoin DeFi is gaining traction, whether Bitcoin L2s can flip Ethereum L2s, and why Asian retail and Western institutions are approaching Bitcoin so differently.

Here's a rundown of the highlights.

Why Bitcoin DeFi, and Why Now?

Mr. Block argued that timing is everything. The infrastructure for Bitcoin DeFi is finally here: Taproot, Ordinals, and rollups like BOB are unlocking new use cases, while the Bitcoin community is hungry to do more than just hold. Compared with Ethereum DeFi's early days, he noted, Bitcoin DeFi starts with a stronger brand, since Bitcoin is the most trusted asset in crypto. The challenge is building permissionless infrastructure around it without compromising the Bitcoin ethos, which means rethinking DeFi for Bitcoin's simplicity and security model rather than just cloning Ethereum.

He also sees Ethereum-native users shifting their attention. Many early ETH holders, himself included, still believe in Ethereum but are linking into the Bitcoin narrative as institutions like BlackRock and companies like Strategy keep adding to their positions. To illustrate how Bitcoin is changing how people borrow, he gave a Taiwan example. After a sharp move in the Taiwan dollar, people who had borrowed Taiwan dollars against US collateral were being pushed to add more collateral. Some in Taiwan now go the other way: they use Bitcoin as collateral and borrow US dollars, preferring to hold an asset that appreciates rather than one that depreciates.

The Flippening: Can Bitcoin L2s Overtake Ethereum L2s?

Alexei framed the big question directly. Ethereum L2s have become dominant but are now competing with Solana, while Bitcoin L2s can do everything ETH L2s do and also have access to Bitcoin holders. How will Ethereum users react when Bitcoin L2s start flipping ETH L2s?

Mr. Block's answer was nuanced. In the short term, he said, a flippening is still unlikely because Ethereum leads on tooling, developer ecosystem, and the maturity of its L2s. But in narrative and attention, Bitcoin DeFi is already starting to flip Ethereum, especially after the halving. Within a few years, he wouldn't be surprised to see a Bitcoin L2s rival ETH L2s in TVL, particularly if Bitcoin-backed stablecoins and restaking solutions keep growing. Still, he said he'd rather bet on both sides, noting that most people have far less exposure to Bitcoin and its L2s than to Ethereum.

Asia Experiments, the West Deploys Institutional Capital

Alexei observed a striking split. In the Asia-Pacific region, retail users and DeFi natives are eager to experiment with Bitcoin L2s early, while institutions are cautious. In the West it's the opposite: retail tends to stay away from DeFi, while institutions and treasury managers are actively looking for ways to earn yield on their Bitcoin. He said large custodians were reaching out to partner with BOB, with announcements expected soon, and noted that institutions tend to stick to established protocols like Uniswap and, more recently, Aave.

Mr. Block traced Asia's appetite to history. Bitcoin mining power was concentrated in China and elsewhere in Asia in the early days, and the Ordinals and BRC-20 wave was largely driven by Asian communities that treated these assets as a new form of NFT or ICO, pushing exchanges like OKX to support them. He contrasted this with the Western obsession with FriendTech around the same time. Together, he suggested, this explains why Asian retail is more experimental with Bitcoin-native assets.

Will Retail Use Bitcoin DeFi Without Knowing It?

Alexei pointed to what makes Bitcoin special: it is mainstream. In his words, "you shouldn't have to be a degen to use Bitcoin and DeFi." He asked whether Bitcoin could finally bring in retail users by hiding the complexity and becoming a better personal finance app.

Mr. Block was convinced it will happen. He pointed to China, where loans and financial products are already accessible from a phone through super-apps like WeChat, while in the West companies like Robinhood and Coinbase are only now moving toward banking. He expects apps built on smart contracts like Aave, Compound, and Uniswap in the background, where users never realize they are using a blockchain. He also noted that exchanges like OKX, Binance, and Bybit, which once focused purely on spot and perpetuals, are now pushing Web3 apps and investing heavily in onboarding retail users.

He also credited Solana and platforms like Pump.fun for making token creation feel casual and accessible, leaving millions of people with Solana as their first blockchain. For Bitcoin, he said, there's a similar opportunity, because Bitcoin itself has no smart contracts and relies on protocols to do more with it. His boldest prediction was that hundreds of millions of people might eventually use Bitcoin as collateral to borrow dollars, for example, to buy a house, while earning interest on top.

Alexei added that Bitcoin has a natural role in the tokenization boom, since every new token needs something to be paired against. As the dollar loses value and stablecoins grow more centralized, he argued the market needs an alternative medium of exchange, and Bitcoin is the strongest candidate.

Who Wins the Race for Bitcoin Liquidity?

Alexei noted that every chain and app, from Sui to Ethereum, now has a Bitcoin strategy, and asked who is best positioned to win. Mr. Block said, as a long-term holder, he prefers not to pick a winner. He suggested betting on several of what he calls "mega L1s," like Solana and Sui, because he expects they will follow when Bitcoin breaks new highs.

On BOB specifically, he called the hybrid L2 design unique: it is modular, uses Bitcoin's security, and gives developers familiar tools like Solidity, effectively bringing Ethereum's expressiveness to Bitcoin. He admitted that despite holding a lot of Bitcoin, he had almost never sent BTC natively to anyone. Using the word "empower," he said that for people who want to do more with Bitcoin than hold it, a hybrid L2 makes sense. He also pointed to Ethereum's L2 fragmentation as a problem that Bitcoin's ecosystem can learn from.

Alexei described the user flow BOB is aiming for. He argued that more people in the space have probably used Bitcoin on BOB than on Bitcoin's base layer, which he said is less a credit to BOB than a sign that Bitcoin's L1 is slow, expensive, and offers little to do. With BOB Gateway, a user can send a single Bitcoin transaction from a hardware wallet and land directly in a DeFi position, without thinking about bridging, gas, or multiple confirmations. He added that BOB can route Bitcoin to other chains too, even Solana, which doesn't have native Bitcoin access.

Should Bitcoin Change?

Alexei raised a question that divides the community: should Bitcoin be upgraded with things like ZK proofs, or stay as it is? He explained that BOB sits in the middle, planning to use BitVM to make things work without any changes to Bitcoin.

Mr. Block was firm that Bitcoin should stay simple. As the community matures and valuations rise, he said, Bitcoin is becoming digital gold, and gold itself is a simple element even if it has many uses. Bitcoin's greatest strength is time:

"Time builds trust, and it builds consensus."

He added that Bitcoin doesn't need to compete with faster or more complex chains:

"I don't want anything to change at Bitcoin."

Instead, he expects multiple protocols to build on top of it, some closer to Bitcoin's ideology and others, like BOB, blending the Ethereum and Bitcoin worlds. He also noted that most people never interact with the Bitcoin network directly, and pointed to poor wallet UX as one reason.

More Bitcoin in DeFi Than in ETFs?

Alexei closed with a spicy question: when will there be more Bitcoin in DeFi than in ETFs? Mr. Block thought the ETFs may actually move on-chain first, noting that portfolio companies of his were working with ETF issuers to tokenize ETF products, much like BlackRock's on-chain fund. But he doesn't think the flippening matters much. ETF buyers want exposure, not composability, just as many people will always leave dollars idle in a bank account. He said he'd happily see trillions flow into Bitcoin ETFs, with perhaps 10% to 40% of that eventually ending up in DeFi. He also pointed to Japan and Hong Kong, where banks are beginning to custody Bitcoin directly, and predicted that tokens will become a third asset class alongside securities and commodities.

Watch or Listen to the Full Episode

This recap covers the main threads, but the full conversation goes deeper on Asia's role in Bitcoin culture, the Pump.fun and FriendTech phenomenon, and how BOB Gateway fits into the picture. Catch the complete episode of the Bullish on Bitcoin Show with Mr. Block on your platform of choice: