Let's talk about how DeFi works on Bitcoin Layer 1.

The core idea is to insert a segment of Meta-Protocol code into the OP_RETURN field. You can think of it as an electronic contract etched onto the blockchain—public, transparent, and tamper-proof.

This "contract" does two things: First, it declares that X BTC from a certain address is locked; second, it simultaneously generates X units of mapped asset W, which can be verified and circulated.

In simple terms, it uses Bitcoin’s native data fields as the ledger, directly writing asset locking and mapping relationships onto the chain. It doesn’t rely on sidechains or cross-chain bridges—all rules are immutably recorded on the Bitcoin mainnet.