Bitcoin is booming on Ethereum: closing at $ 1 billion in value


In short

  • Bitcoin transferred to the Ethereum blockchain is now over $ 800 million, up 37% so far this month.
  • Wrapped Bitcoin and RainBTC remain the most popular transfer protocols, but the HOBC’s HBTC has recently increased.
  • The primary cross-chain coins are all centralized in some way.

Close to 80,000 bitcoins have now been transferred to the Ethereum blockchain, as DFI protocols attract value to their liquidity pools after the initial crypto market reform in early September.

Even as bitcoin and Ethereum prices fell from 1 September, BTC has been moved to the Ethereum blockchain which has risen nearly 37% so far this month, accordingly. Dune Analytics data.

The increase in wrapped bitcoin (WBTC) and other cross-chain bitcoin lockups has pushed its total value from less than $ 600 million to more than $ 800 million at the start of the month. The total value is now equal to more than 2% of the entire Ethereum market cap.

This trend is an indication that despite the price volatility in digital assets, the appetite for Defy returns remains strong even among BTC holders.

Cross-chain transfer protocols such as WBTC and renBTC use either trusted third-party custodians or smart contract-controlled wallets to hold a digital asset, in this case bitcoin, while a replica token on another blockchain, like Ethereum Let’s make. The replication property, sometimes referred to as a wrapped token, is valued at the value of the original token.

The most popular is the BTC-to-Ethereum cross-chain project Wrapped bitcoins, Which accounted for more than 66% of all cross-chain BTCs, with about 53,000 bitcoins closed in that system so far. RenbtcThe second most popular transfer protocol, has grown rapidly, maintaining a similar share of the bitcoin transfer market at around 22%.

A major beneficiary has been Huabi’s HBTC, which has become the third most popular BTC transfer solution with over 6% of the overall market. The total number of HBTCs has exceeded 570% since the beginning of August, when it was less than 1,000 HBTCs; It stands at 4,800 today.

As the amount of bitcoins transferred to Ethereum has increased, there are also concerns about centralization and the role third parties play for the three top transfer solutions, WBTC, RainbTC and HBTC.

HBTC, which Ethereum launched on blockchain In February 2020, the product is Huobi, A centralized crypto exchange based in Singapore. Bitcoin, wrapped in collaboration between several DFI protocols, including Crypto Lending Services Maker and Away, has always used a system of trusted third-party custodians to hold back the original bitcoins that return the WBTC.

And renBTC of the REN protocol was recently Mired in controversies After it was publicized that the ostensibly decentralized protocol is effectively (and still is) controlled by members of the RAIN development team.

Even Vitalik Butirin, co-founder of Ethereum, has weighed in on behalf of users for increased security from projects holding large numbers of native bitcoins.

Despite the risks, transferring bitcoin to the Ethereum chain is only faster. For some, the lure of DeFi returns will justify the risk of trusted third parties. But there is a lot of BTC at stake.