Opinion: BTC becomes first 'victim' of Ethereum's gravity well
Editor's Note: This article comes fromUnitimes（ID：Uni-times）Editor's Note: This article comes from
, by Lucas Campbell, published with permission.
There are now over $100 million in BTC circulating in the Ethereum economy. While this represents only a small fraction of the total BTC market capitalization, there is no denying that the trend is growing. Ultimately, Ethereum will act as a gravity well for global financial assets, with Bitcoin being the first "victim".
why? Because of decentralized finance (DeFi). As Compound, Maker, and a few other DeFi apps start offering permissionless financial services using Bitcoin as collateral, people are choosing to migrate their native BTC to the Ethereum network to take advantage of whatever range of value capture is available on the network . I mean, who wants to sit and hold on to BTC now? boring.
The biggest gravity well for BTC in recent weeks has been Compound. After the launch of COMP liquidity mining in mid-June, the value of BTC locked in this lending agreement has ushered in a huge increase.
secondary title
MakerDAO started the trend
Maker, which was the original driver of the surge in BTC on the Ethereum network, added WBTC as DAI collateral in May of this year. While WBTC has reached its debt ceiling of 10 million DAI, resulting in a low ebb in the amount of new BTC locked in Maker.
Another driver of the recent surge in BTC on Ethereum is Balancer, the liquidity and asset management protocol that launched yield farming in early June. Since June 1, as much as 1,660 BTC, worth about $15 million, has been sucked into the Balancer protocol.
BTC growth trend in the Ethereum network
secondary title
huge reward
The ultimate player behind Ethereum’s appeal to BTC is Curve, the automated market maker (AMM) protocol known for its highly efficient trading of stablecoins. The growing automated market maker recently launched a BTC trading pool featuring three major forms of BTC, including WBTC, RenBTC, and sBTC.
[Remarks: WBTC is jointly launched by blockchain projects such as BitGo, KyberNetwork and Ren, and is based on the BTC-pegged token issued by the Ethereum network; renBTC is the BTC-pegged token issued by Ren Protocol based on Ethereum; sBTC is the On the Synthetix platform, SNX is based on the synthetic assets anchored to BTC issued by Ethereum. ]
The common theme among them is yield farming. This incentive to earn native protocol tokens is simply too enticing. People just can't resist putting their idle BTC to earn this huge reward, usually in the range of 30% - 100% per annum.
secondary title
The Battle for BTC on Ethereum
As far as the tokenized BTC on Ethereum is concerned, WBTC currently dominates, accounting for about 78% of the total BTC on Ethereum. But the introduction of Ren Protocol's RenVM product has brought a new fighter into the arena: renBTC.
[Remarks: Ren Protocol is a cross-chain DeFi project based on Ethereum, and its virtual machine RenVM can realize cross-chain decentralization and trustless exchange of encrypted currency assets. ]
As Keep Network's tBTC struggles to go live on mainnet, renBTC has become the dominant trustless BTC on Ethereum. The only thing renBTC lacks is broad integration across DeFi protocols, an aspect largely dominated by WBTC. However, as Ren continues to demonstrate its trustless benefits, more DeFi protocols will likely support renBTC in the future.
secondary title
With the exception of WBTC and RenBTC, all other forms of BTC on Ethereum are losing market share. The next closest competitors to these two are hBTC and imBTC, which account for 6.38% and 5.44% of the BTC in circulation on Ethereum, respectively. See below.
text
While imBTC was initially relatively popular as an alternative to WBTC, its market share has dropped from 40.8% to 5.44% since the start of the year. Additionally, hBTC has stagnated, as Huobi’s hBTC circulation has idled at 710 BTC since its launch at the end of February this year.
It is increasingly clear that BTC as an asset cannot resist the gravity of Ethereum. The potential for using BTC in DeFi protocols is very strong. Now, due to the very high passive income opportunities offered by liquidity mining, although the risks are sometimes high, BTC has no chance to escape.
BTC on Ethereum is a big event and a trend. This is undeniable. Now the question is how much BTC will end up on Ethereum, given that it currently accounts for only 0.05% of all BTC? 1%? 5%? or more?
Could the number of BTCs on Ethereum surpass the number of BTCs on the Bitcoin network? It seems crazy to even think about it.
But only time will tell.
