- The fact that Bitcoin can be leveraged through a different network today was unheard of a couple of years ago.
- Bitcoin was mined individually up until January 2019 when the concept of Wrapped Bitcoin took birth.
- The efforts of the Republic Protocol, Kyber Network, and BitGo have made cross-chain transactions possible today.
The fact that Bitcoin can be leveraged through a different network today, was unheard of a couple of years ago. Bitcoin was mined individually up until January 2019 when the concept of Wrapped Bitcoin took birth. Coined WBTC, it is an efficient way to leverage Bitcoin (BTC) on the Ethereum network with a ratio of 1:1. The efforts of the Republic Protocol, Kyber Network, and BitGo have made cross-chain transactions possible today. The data by Intotheblock highlights on-chain insights of WBTC.
A Low-down on Growth Factors of WBTC
Approval of WBTC as collateral for DAI loans – A paltry number of 58 daily active addresses in 2019 did not catch eyeballs on WBTC. However, since MakerDAO’s approval of WBTC as collateral for DAI loans, the number of users has shot up. So much so that the market capitalization of WBTC grew by 192% in the second year of its running. The daily active users also crossed the triple-digit figure to reach 300.
The alliance between Curve, Ren, and Synthetix – An incentivized pool offering liquidity to Bitcoin tokens on the Ethereum network went live on 19th June 2020. It will be available for 10 weeks and the alliance is part of the yield farming process. The process entails clever strategies by putting crypto at the hands of a startup’s application and earns greater returns. The pool will yield an attractive basket of token incentives for trades between sBTC, WBTC, and renBTC.
Spike in average balance and transaction volume – As a result of the incentivized pool, large organizations too jumped into the party with the hope of making profits. It was a matter of a few days before the transaction volume reached $300 million. Organizations bring in hunks of money that average users cannot afford. Additionally, the average balance of a WBTC holder spike up to $30,800 towards the end of June.
The developments in the integration of on-chain transactions with the help of more than one Bitcoin has expanded the DeFi market on the whole. The growth is purported to be an uptrend as integrations within the networks have benefited all parties. The smart contract functionality has shown the way forward for digital assets over various platforms.