Tokenized Bitcoin on Ethereum exceeds 10,000 BTC, with WBTC dominant
The number of Wrapped Bitcoin (WBTC) in circulation surpasses 10,000 BTC, showing strong demand for using Bitcoin in Ethereum DeFi.
On June 26, 2020, Tokenized Bitcoin on Ethereum exceeds 10,000 BTC, with WBTC dominant. The number of Wrapped Bitcoin (WBTC) in circulation surpasses 10,000 BTC, showing strong demand for using Bitcoin in Ethereum DeFi.
Bitcoin holders who wanted to earn yields on their BTC without selling it could convert to WBTC and then use it in Ethereum -based lending protocols like Compound or Aave, or provide liquidity to decentralized exchanges. This allowed Bitcoin to participate in DeFi's explosive growth while nominally maintaining exposure to Bitcoin's price.
The WBTC model involved trusted custodians holding actual Bitcoin and issuing equivalent ERC-20 tokens on Ethereum. When users wanted to unwrap their WBTC back to native Bitcoin, the tokens were burned and Bitcoin was released from custody. This process introduced centralization and counterparty risk—users had to trust custodians to maintain proper reserves, implement security measures, and honor redemption requests.