DeFi rides the wind and waves, anchoring BTC is full of vitality
Text | Edited by Li Zheweng | Produced by Bi Tongtong | PANews
For a long time, Bitcoin and Ethereum, the duo of the encrypted world, have been different in terms of currency attributes. The former is usually regarded as the basic currency, and "digital gold" and "anchor of the encrypted world" are the foothold of its narrative, while The currency attribute of Ethereum is more application-oriented, and practitioners generally pay more attention to higher-level "currency applications", such as over-pledging ETH to "derivative currency".
image description
image description
Meme circulated in the community: Comparison of native BTC and anchored BTC on Ethereum｜Source: Network
secondary title
Anchoring BTC internal insights:All indicators of wBTC are top-notch,image description
Anchoring the distribution of distribution shares within BTC｜Source: Dune Analytics@eliasimos
From the internal perspective of anchoring BTC, as of August 5, wBTC has an absolute majority with 75.8% of the issued share. Ren BTC launched by REN Protocol and sBTC launched by the derivatives aggregation protocol Syntheticx have issued shares of 11.2% and 4.89% respectively. Occupy two or three. The combined distribution share of more than 90% of the three is enough to prove their pivotal status.
From the perspective of on-chain indicators, the total number of addresses, active address ratios, and large-value transfers of these three anchored BTCs (Note: According to Intotheblock’s classification, transfers with a single value of more than US$100,000 are classified as “large-value transfers.” ”) and other aspects still lead the anchored BTC sector.
From the perspective of the total number of addresses, from July 1st to July 31st, the three anchored BTCs all showed a continuous upward trend, and the growth rate of renBTC was the most astonishing. The peak number of total addresses within 30 days was 319, an increase of about 111%; The total number of wBTC addresses peaked at 3,800 within 30 days, an increase of about 17% within 30 days.
From the perspective of active address ratio indicators, during the period from July 1st to July 30th, the average ratios of the three anchored BTC active addresses were all higher than 5%, which was better than the average ratio of ETH active addresses (1.20%) during the same period. The level of USDt-erc20 in the same period was comparable; among them, renBTC performed outstandingly, with an average active address ratio of 42.78% in the same period. The comparison of this indicator reflects to a certain extent that the anchored BTC is an important active agent in the Ethereum ecology, and the anchored BTC such as renBTC is even more active than USDt-erc20 in some scenarios.
secondary title
Explosive Growth Twin Engines:Top lending projects open to pledge + liquidity mining frenzy
Regardless of the total amount of external issuance, the richness of use cases, or internal indicators such as the total number of addresses, active address ratio, and transfer value, the anchored BTC has undoubtedly achieved impressive and solid growth. What is the mystery behind this? ? According to PANews analysis, there are two key points in time.
image description
As of August 1, Beijing time, nearly half of wBTC is pledged in Maker｜Source: nansen.ai
image description
In the Curve liquidity incentive pool, the sub-item growth of wBTC, renBTC, and sBTC｜Source: Dune Analytics
image description
Curve and other two parties jointly stimulate the growth of deposits in the liquidity mining pool｜Source: Curve Finance
According to the data on the Intotheblock chain, on June 18, Synthetix, a synthetic asset platform, announced that it jointly launched a new liquidity incentive pool with Curve and Ren. After providing liquidity incentives for Bitcoin-anchored coins based on Ethereum, wBTC, The on-chain indicators of renBTC and sBTC have increased significantly. The number of transfers, transfer amount, and number of active addresses and other indicators have increased by nearly 10 times within 3-5 days, and basically continued to be higher than before the launch of the liquidity incentive pool in June and July .
Within one month after the above-mentioned liquidity incentive pool was launched, more than 25 million US dollars of deposits were absorbed, and it is still growing. According to data from Curve Finance, as of August 1, Beijing time, the total liquidity in the liquidity incentive pool was close to 35 million US dollars.
Under the liquidity-incentive mining frenzy, the project parties anchoring BTC enjoy the user growth and data increase brought about by the ingenious cold start. For users, this upsurge is an excellent opportunity to make profits.
Due to the gap in DeFi operations, it has always been a problem for individual users to participate in the experience and use of DeFi. PANews combined experience and shared with the community, sorting out "parts" of the path of yield farming (liquidity mining) using anchored BTC. Readers and friends can do it themselves Take it for reference.
According to previous media reports, the anchored BTC can also be used for arbitrage between CeFi and DeFi loans. Compared with pledged BTC loan USDT, the interest rate can be reduced by 25% or even 50%. In addition, users can also use the anchored BTC for Open the leverage of Bitcoin trading pairs on DEx such as Uniswap and Kyber.
secondary title
The growth bottleneck of anchoring BTC is obvious, and the geometry of the long-term trend remains to be examined
The growth trend of anchoring BTC is undoubtedly encouraging, but its future growth ceiling is also visible to the naked eye, and it may be difficult to solve in the short term:
Insufficient scalability. The development of anchoring BTC is difficult to break away from the context of DeFi. According to a recent research report by the cryptocurrency data platform Messari, the market value of the DeFi sector only accounts for 1.5% of the overall market value of cryptocurrencies, while the anchored BTC sector accounts for about 0.5% of DeFi. Under this premise, the various currencies anchored in BTC are still limited by their issuance mechanism, which further hinders the expansion of scale.
Taking renBTC as an example, according to the analysis of the Blockchain Research Institute, the value of the REN pledged by the node is required to be three times the value of the mortgaged BTC (it is necessary to explain that the three times is not a hard rule, but obviously the higher the multiple, the safer the system), this directly The number of renBTC is limited. Based on the market value of REN of about 150 million US dollars, even if all REN is used to anchor the collateral, only 50 million US dollars of anchored bitcoin can be issued. In the case of a single bitcoin of 10,000 US dollars, only 5,000 can be issued. renBTC.
The process of anchoring BTC from generation to transfer to yield farming is still relatively complicated, with many hidden risks and intercepted many users. Take the anchored BTC incentive pool jointly launched by Curve, Synthetix, and REN as an example. If users want to use Balancer, Curve and other platforms to earn profits, they need to be at least familiar with how to convert different anchored BTCs and the liquidity of Balancer/Curve and other platforms. Injection and other operations involve multiple protocols and software. If there are accidents or accidents such as operational errors, asset unanchoring, and single protocol loopholes being transmitted to combined protocols, users may lose a lot of assets.
The giant whale dominates and anchors BTC to centralize prematurely. Compared with the distributed state of BTC in the early stage of development, wBTC, renBTC, sBTC, imBTC and other anchored BTCs all have the problem of being dominated by large holders. The average whale holding rate of the first three is about 92%, which is obviously related to tokens. The constraint of being distributed to a wider scene.
Anchoring BTC is still full of controversies on the way forward. One view is that this phenomenon will reduce BTC's own chain transactions, reduce miners' returns, and weaken network security. This view is not unreasonable. Anchoring BTC quickly The slow progress of Bitcoin’s second-layer network such as Lightning Network and Liquid during the same period of expansion is a side proof.
Of course, some community members believe that anchoring BTC is a win-win situation for Bitcoin and Ethereum. The distribution scope, practical utility and value storage status of the former will increase, while the network economic activity, liquidity and distribution scope of Ethereum will also be enhanced.
From the perspective of on-chain indicators, in the past 7 days, the data growth of the number of active addresses, transfer quotas, and "large transfer quotas" of several major BTC anchors has shown signs of fatigue, and has even shown a downward trend. Can the lightning-like asset categories in China continue to be stable and long-term when the enthusiasm for liquidity incentive mining is fading?
