According to Cointelegraph, Rebar Labs plans to introduce the first Bitcoin-native platform aimed at shielding traders from Maximum Extractable Value (MEV) strategies, such as frontrunning, by the end of 2024. CEO Alex Luce highlighted the growing risks in Bitcoinâs ecosystem of decentralized exchanges (DEXs) and layer-2 scaling solutions (L2s), which have reinvigorated the blockchain network but also exposed traders to harmful MEV practices.
Luce explained that MEV, particularly frontrunning, is becoming increasingly common on Bitcoin. Rebarâs Shield aims to be Bitcoinâs equivalent of Ethereumâs Flashbots, which has protected approximately $43 billion worth of DEX transactions from MEV since 2021, according to Dune Analytics. Shield is designed to protect traders from harmful MEV while promoting interoperability among Bitcoinâs fragmented DEX ecosystem. Luce noted that Bitcoinâs DEXs are not very interoperable, leading to fragmented liquidity. Good MEV can help even out prices and assist users with execution.
Rebarâs Shield also aims to enhance returns for Bitcoin miners, who process transactions and post them to Bitcoinâs blockchain ledger. Luce mentioned that Rebar is in discussions with major miners to launch Shield with a significant portion of the Bitcoin networkâs hashrate on board.
Bitcoinâs 2021 Taproot upgrade enabled the network to support more complex activities, including creating and trading other types of tokens and minting non-fungible tokens (NFTs). However, Bitcoin-native decentralized finance (DeFi) is still in its early stages and largely limited to crypto-native traders. Luce pointed out that daily trading volume is currently in the millions, which is not significant. He views the current state of Bitcoin-native DeFi as an early beta phase with limited user interaction. The target user base is expected to evolve over the next 12 to 24 months.
Meanwhile, Bitcoin-native L2s such as Babylon, Core Chain, Rootstock, and Stacks are gaining traction. The total value locked (TVL) on Bitcoinâs L2s stands at approximately $2 billion as of Oct. 18, according to DefiLlama. Luce emphasized the importance of good execution on Bitcoin, warning that traders might move to L2s if execution on Bitcoin does not improve. He believes this would be a missed opportunity, given Bitcoinâs potential as a market.
