Accelerating the siphoning of Bitcoin, Ethereum is becoming an "absolute black hole" for encrypted assets?
Editor's Note: This article comes fromVernacular Blockchain (ID: hellobtc), Author: A Poplar, reproduced by Odaily with authorization.
Editor's Note: This article comes fromVernacular Blockchain (ID: hellobtc)Vernacular Blockchain (ID: hellobtc)
On September 20, the circulation of anchored bitcoins on Ethereum officially exceeded 100,000, reaching a new milestone. from
The DeFi summer will gradually start in June
After that, the number of bitcoins flowing into Ethereum began to gradually show an acceleration trend, and it surged nearly 10 times in just three months.
Only two weeks later, on October 4th, "BTC on Ethereum" exceeded 140,000 (defipulse data). In the past month, the increment of more than 10,000 per week has risen rapidly, so that the speed of inflow into Ethereum is far away. Exceeding the speed of mining output in the same period (about 6000/week), it is amazing. Ethereum has gradually evolved into an absolute black hole that siphons Bitcoin.
secondary title
Bitcoin finds a new narrative
With the blowout development of the Ethereum DeFi ecosystem, the demand for Bitcoin as the highest quality asset in the circle has also begun to emerge, especially for "giant whales" and "classical players", the BTC in the hands of the DeFi feast can no longer be "Non-interest-bearing assets", on the contrary, can participate in various use scenarios of DeFi under a certain risk balance.Liquidity miningIn the picture below, a "giant whale" on Aave mortgaged 8,000 BTC and lent more than 60,000 ETH, millions of LINK, and 800 YFI, which is one of the best examples.
Similarly, the growth and entry of the DeFi ecosystem is also inseparable from the value support of Bitcoin, the native asset. To some extent, this can be understood as the "Bretton Woods System" in the DeFi ecosystem—the bottom layer of DeFi, which requires a kind of An "absolute asset" that can be anchored.
Therefore, whether it is a Bitcoin "Holder" or a DeFi "scientist", Bitcoin as a core asset cross-chains to Ethereum to participate in DeFi (mortgage lending,
Liquidity mining
and other forms), it can be regarded as a perfect match.
At the same time, Bitcoin, which has been quiet for the past three months, has slowly found a new position in the increasingly popular DeFi boom-entering the DeFi ecosystem with unprecedented high returns and diversified scenarios, which has once again strengthened and confirmed Bitcoin. Relatively core position in digital assets.
Therefore, BTC's entry into the Ethereum ecosystem and DeFi in the form of ERC20 is a win-win choice for both parties, and once the scene and demand appear, the market volume is almost immeasurable. As of October 8, about 140,000 bitcoins, worth $1.5 billion, had flowed into Ethereum and the DeFi ecosystem in the form of ERC20.
This may be just a small test of the 100 billion market in the future. BTC is becoming the largest anchor asset in addition to USDT and DAI in the form of ERC20 such as WBTC and renBTC.
In fact, the current pattern distribution of the entire ERC20 bitcoin is quite similar to that of the US dollar stable currency - both centralized and decentralized designs, and presents a pattern of "one super and many strong".
secondary title
Competitive landscape in which one thriving and a hundred flowers blooming
At present, among all the anchored bitcoins on the Ethereum chain, the top three are WBTC, renBTC, and HBTC, and the top two dominate. Among them, the circulation of WBTC accounts for about 73% of the total amount of anchored Bitcoins on Ethereum. operate.
According to defipulse data, on January 1 this year, the minting volume of WBTC was only 591 pieces, and on October 1st, nine months later, the total circulation of WBTC reached 92,017 pieces, a full 155 times increase, corresponding to the surge in WBTC minting volume What is synchronized is its ecological siege. At present, almost all top DeFi have achieved coverage.
However, as an ERC-20 token based on Ethereum's 1:1 fully mortgaged Bitcoin, WBTC relies on a consortium model, which is a bit like the existing bank's second-tier operating system, where custodians (only one, BitGo) and ordinary There is also the role of "acceptor" (requires qualification certification, multiple) among users. The entire operation mechanism of WBTC revolves around one institution (WBTC DAO) and two roles (Merchant acceptor and Custodian custodian).
Among them, the acceptor handles the casting, burning and custody of assets, which directly means centralization-users need to rely on and trust the acceptor to carry out the casting and burning of WBTC.
The specific casting and circulation process is that the user first makes a request to a qualified acceptor, and then the acceptor performs the necessary KYC/AML process to verify the user's identity. After completing a series of necessary operations, BTC is transferred from the user to the acceptor, and WBTC is transferred from The acceptor transfers to the user. The same goes for the combustion process.
However, renBTC is different from WBTC’s relatively centralized BTC custody solution. Users deposit native BTC into the designated RenBridge gateway as collateral, and RenVM issues corresponding renBTC in the Ethereum network through smart contracts. The entire issuance process is relatively decentralized.
Therefore, renBTC is regarded as a BTC anchoring solution in another dimension—neither relying on any central custodian nor requiring its users to perform mandatory KYC/AML procedures, so it is expanding rapidly in DeFi projects. The only BTC-anchored project with a circulation of more than 10,000 WBTC.
In addition, imBTC led by imtoken, synthetic sBTC on synthetix, and decentralized tBTC led by keep are also in full bloom.
After the demand for BTC to enter various DeFi scenarios emerged, a safe and reliable cross-chain bridge has become the core factor that bears the brunt, especially for the majority of Bitcoin "Holders", who hold a lot of money, and security concerns are the first reason to stay on the sidelines reason.
Therefore, whoever can guarantee absolute security and experience a convenient BTC cross-chain solution may become the next "Tether" of ERC20 Bitcoin, a market that may be worth hundreds of billions in the future.
At the same time, with the popularity of ERC20 Bitcoin, the Bitcoin ecology at the payment level is also secretly suffering a lot. Most directly, if the rate at which bitcoins flow into Ethereum continues to follow this trend, it will undoubtedly weaken the circulation and payment of bitcoins in the bitcoin blockchain.secondary titleERC20 Bitcoin is gradually shaking up the Lightning Network
Since 2020, the Bitcoin Lightning Network (Lightning Network), which has been committed to solving the payment of Bitcoin in small and high-frequency retail scenarios, has become less and less popular, and even seems quite lonely. You must know that the beta version began to land in March 2018 It was once the focus of attention in the circle.
as bitcoin
Layer 2 expansion solution
, the Lightning Network aims to increase the speed of Bitcoin transactions and reduce the cost of Bitcoin transactions. Withdraw and transfer Bitcoin with high efficiency.
However, according to 1ML data, as of October 8, the number of locked bitcoins in the Lightning Network was only 1,096, which is not only far inferior to the tens of thousands of locked bitcoins of WBTC and renBTC, but also lags behind HBTC and others. It only ranks sixth among ERC20 bitcoins.
Therefore, as a star project that has been cultivated for nearly three years, the report card that the Lightning Network has now handed over is undoubtedly unsatisfactory compared with the rising stars of ERC20 Bitcoin. As far as the network is concerned, it can be called a dimensionality reduction blow.lightning networkEven though ERC20 Bitcoin is temporarily limited by the congestion of the main chain of Ethereum, resulting in the payment level not having much advantage in handling fees compared with the main chain of Bitcoin, but combined with the advancement of Ethereum layer 2, especially relying on the innovative fertile ground of the Ethereum ecology, ERC20 bitcoin is gradually becoming a black hole in the true sense of BTC, whether it is at the payment level or in the derived DeFi scene.
If the inflow of Bitcoin into Ethereum continues to increase, and users choose more ERC20 forms at the transfer level, then for the Bitcoin network that has completed the third halving and miners' income is increasingly dependent on on-chain fees, it is undoubtedly It will be a far-reaching change.
Interestingly, the two sides seem to have switched roles as well. on the one hand,
lightning network
Start thinking about adding Liquidity Mining to yourself, and attract BTC deposits by issuing Gov Token, trying to increase the usability of the Lightning Network.
