Odaily Frontline | Report: More than $500 million in Bitcoin has flowed to Ethereum this year

This article comes fromDecrypt, original author: Robert Stevens

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Summary:

This article comes from

, original author: Robert Stevens

Odaily Translator |

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Summary:

- Many Bitcoins have been transferred to Ethereum.

- Just this year, over $500 million in Bitcoin (a little over 0.3% of the total supply) was tokenized on Ethereum.- These bitcoins are swapped for Ethereum-based bitcoins and used in various DeFi applications.More than $500 million in bitcoin has been sent to ethereum this year, or 0.3 percent of its total supply, according to research released today by cryptocurrency data firm Messari. What is the reason you ask? That is naturally the DeFi that continues to be hot this summer.

“Considering that Bitcoin on Ethereum currently accounts for only 0.3 of its total supply and DeFi is still thriving, the opportunity to build a decentralized bridge between the two chains cannot be ignored.” Messari tweeted express.

The new favorite DeFi in the encryption field that Messari talked about has given the encryption market great vitality during the new crown epidemic. According to data from DeFi Pulse, the total value (TVL) of locked assets in DeFi smart contracts currently exceeds $9 billion (the latest data shows $9.46 billion), an increase of $8 billion in less than three months.

The vast majority of DeFi protocols are based on Ethereum. Messari is in

in a blog post

Elaborating on this, Bitcoin holders are moving their funds to Ethereum to join the DeFi frenzy.

This is because these investors cannot use Bitcoin on Ethereum’s DeFi protocol. In order to participate, they must first lock Bitcoin in a smart contract, thereby obtaining Ethereum-based tokens to represent Bitcoin, and then participate in various DeFi protocols.Companies offering such services include digital asset custody firm BitGo. BitGo launched WrappedBTC (WBTC) in January last year. It is an escrow service, meaning you have to escrow your funds with BitGo. As of press time, Coin Gecko data shows $456 million in funds in its smart contracts.Glassnode data shows that the supply of WBTC (the Ethereum ERC20 token anchored to Bitcoin) has increased rapidly, more than doubling its supply in August alone as demand from the DeFi ecosystem soared. The circulating supply of WBTC in late June was 1297 WBTC, this number has now reached 33762 WBTC.

Odaily Note: On August 26, BitGo Chief Technology Officer Ben Chan said that due to the increase in Ethereum fees, BitGo is planning to build an Ethereum sidechain with community partners. BitGo's first product, WBTC, is an ERC-20 token pegged 1:1 to Bitcoin. Currently, BitGo is holding approximately 46,000 bitcoins through an escrow scheme.

While native DeFi protocols exist, they are all very young, and getting blockchains to collaborate with each other in a non-custodial manner remains a huge challenge for the industry.