DLCs are “Discreet Log Contracts,” a technology that was invented at MIT by Tadge Dryja who later co-invented the Lightning network. The whitepaper
was published 4 years ago but just became feasible with Bitcoin's Taproot update. Last Fall, I was cycling out of my first startup MarketMuse and was looking for a way to build something meaningful in crypto. DLCs allow you to build an escrow contract around Bitcoin which enables tremendous utility.
A DLC lets you use your Bitcoin without needing to transfer it elsewhere. The solution to using Bitcoin in other systems has been to send it over to a custodian - you can either bridge it to another protocol, but you then send it to that protocol to lock up/secure. Or you can wrap it, which is basically sending it to a trust. Both require you to send it to a custodian, which goes against everything Bitcoin is about. As soon as you send Bitcoin to a custodian, you lose sovereignty and you put your Bitcoin at risk. Most hacks and issues in crypto have to do with custodians making mistakes on other people's capital.