11.11. BTC Liquidity Pools coming to Hive

@vsc.network on Hive

While the mainnet of VSC (now rebranded to MAGI) has been running since Q2 of 2025, the main Dapp "ALTERA" - the first decentralized DeFi application on Hive - hasn't had much use cases until now. But things are about to change. In just a few days, on the 11th of November, BTC liquidity pools are coming to Hive. This is a big deal, since it will be the first time that we'll have access to native BTC pools on our blockchain (technically as a Layer 2). This means that you will soon be able to send BTC from any wallet to Altera and vice versa. Since we will also have a liquidity pool, it will also be the first time that we can actually trade BTC with HIVE and HBD right here on Hive.

The other reason for why this is a big step for our ecosystem is that users may then be able to access Hive without having to use a CEX (assuming the liquidity pools are large enough). Since not everybody wants to go through that route, Hive has essentially been cut off from DeFi until now. In other words, there should be a lot more liquidity coming to Hive with this addition.

Just a few weeks after the launch of this first liquidity pool, Altera will be adding a liquidity pool with DASH in December. Recently, DASH has been quite popular as it has gained momentum by the whole privacy narrative in the crypto space. It's definitely a good choice as the second integration.

Quick Recap: What is VSC/MAGI anyway?

Since I think not many have watched the VSC presentation on HiveFest, here is a bit of a summary of what to expect and why this development is beneficial to Hive.

I hope it's okay if I use some screenshots from the presentation @lordbutterfly. I really recommend watching the video as the features are explained in more detail there, but here is a quick recap of the main points.

• What problem is VSC/MAGI trying to solve?

The main issue tackled by this project is blockchain interoperability. So far, everyone had to install and maintain different wallets for each chain and even wallets that offer cross-chain support don't have a great UX/UI. VSC solves this by integrating different coins all into one wallet. This simplifies the interaction and transferring assets by a great deal.

There are 3 main features that stand out for this network.

• First, cross-chain swaps work differently: we simply have HBD as a base asset for all pairs. The advantage to this approach is that it reduces volatility. Instead of two volatile coins being locked up against, in this approach there is only one unstable asset; e.g., BTC. I suppose if we wanted to trade BTC/HIVE there would be a pool for BTC/HBD and then trade the HBD in the HIVE/HBD pool in a next step.
  Another great aspect to this is that this system will likely soak up a lot of liquidity since we will need a lot of HBD being locked up as well as HBD being needed to transact on MAGI. One thing I am not sure about is the "Hive demand rises as collateral"statement. Will this mean that we can use Hive as collateral to receive HBD? If so, this would be a really fast and straight forward way of creating more HBD which would be in high demand.

• The second feature is smart contracts.

Since SCs are built in WebAssembly (WASM) they are highly versatile and easy to use. It will also be the first real decentralized option for SCs on Hive (yes, we essentially waited for almost a decade to get this - although it will be on L2). Although we already have Hive-Engine, it is not a truly decentralized platform and I wonder if projects will actually migrate to MAGI (I doubt Splinterlands would do this though).

• The third feature is Native Asset Mapping.

This is a brand new and innovative feature that is being introduced to the crypto space. For the first time, native asses will be usable across chains. It's probably going to take some time to get used to a BTC wallet address being able to hold ETH. Not only that, but transfers will be feeless, i.e. it will be possible to send BTC on MAGI without any fees! Should this catch on, I have no doubt that this would be a huge push for Hive in general. A bit of marketing will be needed for sure. Perhaps the biggest hold up might come from new users not knowing if they can trust this network. HIVE and MAGI are still the underdogs after all.

Finally, we also get to learn a bit about the ecosystem incentives. While the white paper is not out yet and the MAGI token will only launch in 2026, we know the following already:

To me it is still unclear why the network needs a token of its own since we mainly have HBD to run things. If you know, please share, otherwise we'll probably soon find out in the white paper.

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As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!

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