Decrypt • Feb 23, 22
Wrapped Bitcoin Inflows Stall as Ethereum DeFi Use Down: Report
A bearish crypto market and falling use of DeFi have corresponded with a lack of new Bitcoin flowing into Ethereum, according to data from CoinMetrics.
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Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards.
The price of Wrapped Bitcoin has risen by 2.23% in the past 7 days. The price declined by 2.16% in the last 24 hours. In just the past hour, the price shrunk by 0.41%. The current price is $16,138.665 per WBTC. Wrapped Bitcoin is 90.05% below the all time high of $162,188.26.
The current circulating supply is 217,849.262 WBTC.
Wrapped Bitcoin (WBTC) is an Ethereum token that is intended to represent Bitcoin (BTC) on the Ethereum blockchain. It is not Bitcoin, but rather a separate ERC-20 token that’s designed to track Bitcoin’s value. WBTC was created to allow Bitcoin holders to participate in decentralized finance (“DeFi”) apps that are popular on Ethereum. Through a WBTC partner, 1 Bitcoin can be exchanged for 1 Wrapped Bitcoin, and vice-versa. The BTC that backs WBTC is verifiable through a “proof of reserve” system that verifies the 1:1 backing between minted WBTC tokens and Bitcoin stored by custodians. WBTC is maintained by a group called the WBTC DAO that consists of over 30 members. It was originally started by BitGo, Ren, and Kyber.
is a 1:1 representation of the underlying asset , used on the . track the asset's value they represent and can often be redeemed for that asset. In other words, wrapped make it possible to utilize crypto assets on non-native blockchains. This means that consumers can use Bitcoin in its wrapped form to interact with Ethereum's ecosystem of and . The Ethereum ecosystem may benefit from Bitcoin's by tokenizing it as an token.
Blockchains are designed to function in isolation. Different blockchains offer specific functionality in the crypto realm, and there is no adequate method for data transmission between them. Tokens created on one blockchain are difficult to transfer to another. Currently, certain technologies exist that allow communication across multiple blockchains. Some of these systems prefer a centralized exit between chains. Others rely on a root chain-based independent consensus model. However, neither approach allows for seamless transitions between multiple consensus systems, resulting in a time-consuming validation procedure and a lack of data transmission between chains. Wrapped Bitcoin tokens aim to address the bottleneck, improve communication between blockchains, and unlock new opportunities for users. Wrapped tokens, in general, also improve liquidity and capital efficiency for both controlled and . The ability to wrap idle assets and employ them on another chain can help to add liquidity to the system.
Wrapped Bitcoin attempts to expand on Bitcoin's advantages by focusing on the following:
Beneficial for traders: Since Bitcoin acquires a major share of the crypto market, decentralized exchanges, often limited to ERC-20 tokens, suffer from low trading volumes and liquidity. Wrapped BTC provides customers with better liquidity and involvement. Also, Wrapped Bitcoin users can benefit from high-speed transactions on Ethereum.
Institutions: Users of decentralized applications like exchanges, wallets, and payment services no longer must worry about handling numerous cryptocurrencies across different nodes and transaction types. WBTC combines the advantages of Ethereum and Bitcoin, allowing users to manage the wrapped assets using only an Ethereum node.
DApps: Bitcoin payments may now be used in smart contracts for lending protocols, funds, prediction markets, and token sales in decentralized apps.
Custodian: The entity or party that holds the asset is the custodian. The keys to minting tokens are in the hands of custodians.
Merchant: The institution or party to whom wrapped tokens are issued is known as the merchant. The wrapped token is distributed mostly through merchants. Each merchant has a key that may be used to start the of new wrapped tokens and the of old wrapped tokens. Cryptocurrency burning is when a fraction of tokens are sent to a wallet with no . This means the tokens are lost forever. Tokens are usually burned to reduce availability and increase market value.
Users: The holders of the wrapped token are referred to as "users." Wrapped tokens may be transferred and transacted in the Ethereum network just like any other ERC20 token.
Member of the WBTC : A multi-signature contract governs contract amendments and the addition and removal of custodians and merchants. The WBTC DAO holds the keys to the multi-sig contract owned by institutions.
Assets are exchanged for wrapped tokens by custodians and merchants. This is accomplished through two types of transactions: minting (the generation of wrapped tokens) and burning (the reduction of wrapped token supply).
WBTC was initially on October 26, 2018, as a collaborative effort by , , (previously Republic Protocol), and other community partners to bring Bitcoin's liquidity to the Ethereum ecosystem and improve all decentralized apps.
BitGo is a crypto trading and financial services company cofounded in 2013 by Mike Belshe (a computer scientist and entrepreneur). It is also a digital asset custody provider for institutions and the first and only custodian of WBTC currencies.
Loi Luu, Yaron Velner, and Victor Tran launched Kyber Network in 2017 and are located in Singapore. The company offers a blockchain liquidity protocol that integrates multiple cryptocurrency tokens and DeFi apps.
Ren, like Kyber, is a business that uses technologies like RenVM, RenBridge, and others to combine cross-blockchains centered on cryptocurrency assets and DeFi applications. Taiyang Zhang and Loong Wang started Ren in 2017. Kyber Network, together with Ren, helped create WBTC and continues to be a merchant in the WBTC ecosystem.
The initial WBTC whitepaper was released in January 2019. In the same month, the token was launched with eight merchants (institutions) facilitating Bitcoin-to-WBTC conversions.
Kyber Network and REN are the merchants who mint and burn WBTC tokens, and BitGo is the custodian who holds BTC and the keys to mint WBTC tokens.
The process of generating freshly wrapped tokens is known as minting. A custodian must do minting in the wrapped framework, but it must be "started" by a merchant. It's vital to remember that the user isn't involved in the minting process. It's a series of exchanges between the merchant and the custodian. WBTC minting events in chronological order:
The merchant initiates a transaction authorizing the custodian to mint X WBTC and send it to the merchant's Ethereum address. The merchant sends X BTC to the custodian. Custodian waits for six confirmations of the BTC transaction before creating a transaction on the Ethereum chain to mint X fresh WBTC tokens.
The BTC that backs WBTC is verifiable through a "proof of reserve" system that verifies the 1:1 backing between minted WBTC tokens and Bitcoin stored by custodians.
WBTC does not have a set supply limit. The number of tokens in circulation is precisely proportional to the quantity of Bitcoin reserves in the WBTC network since Wrapped Bitcoin backs Bitcoin at a 1:1 ratio.
Assets with the biggest change in unique page views on coinbase.com over the past 24 hours.
The price of 1 Wrapped Bitcoin currently costs $16,138.66.
The current market cap of Wrapped Bitcoin is $3.52B. A high market cap implies that the asset is highly valued by the market.
The all-time high of Wrapped Bitcoin is $162,188.26. This all-time high is highest price paid for Wrapped Bitcoin since it was launched.
Over the last 24 hours, the trading volume of Wrapped Bitcoin is $106.22M.
The current circulating supply of Wrapped Bitcoin is 218 thousand.
The median time that Coinbase customers hold Wrapped Bitcoin before selling it or sending it to another account or address is 4 days.
Wrapped Bitcoin ranks 115 among tradable assets on Coinbase. Popularity is currently based on relative market cap.
Currently, 80% of Coinbase users are buying Wrapped Bitcoin. In other words, 80% of Coinbase customers have increased their net position in Wrapped Bitcoin over the past 24 hours through trading.
Certain content has been prepared by third parties not affiliated with Coinbase Inc. or any of its affiliates and Coinbase is not responsible for such content. Coinbase is not liable for any errors or delays in content, or for any actions taken in reliance on any content. Information is provided for informational purposes only and is not investment advice. This is not a recommendation to buy or sell a particular digital asset or to employ a particular investment strategy. Coinbase makes no representation on the accuracy, suitability, or validity of any information provided or for a particular asset. Prices shown are for illustrative purposes only. Actual cryptocurrency prices and associated stats may vary. Data presented may reflect assets traded on Coinbase’s exchange and select other cryptocurrency exchanges.