The BTC became the first "victim" of the Ethereum gravity well

Original title: "the view that | BTC became the first 'victim' of the ethereum gravity well"

Original article by Lucas Campbell

Text: Unitimes

More than $100 million of BTC is now circulating in ethereum's economy. Although this is a small fraction of BTC's total market capitalisation, there is no denying that the trend is growing. Ultimately, Ethereum will act as a gravity well for global financial assets, with Bitcoin the first casualty.

Why? Because decentralized finance; (DeFi). With the Compound, Maker, and other DeFi apps starting to use Bitcoin as collateral for unlicensed financial services, people are choosing to migrate their native BTC to the Ethereum network to take advantage of whatever value capture is available on the network. I mean, who wants to sit back and hold on to BTC now? Boring.

They did this by depositing BTC and exchanging it for ERC20 tokens on Ethereum at a price of 1:1, so the tokens were actually tied to BTC. These Ethereal BTCS come in many forms, from the more centralized & NBSP; WBTC  To a much less permissive NBSP; RenBTC  And so on.

The biggest gravity well for BTC in recent weeks has been Compound. Following the launch of COMP Liquidity Mine in mid-June, the value of BTC locked in this loan agreement has seen a substantial increase.

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MakerDAO kicked off this trend.

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Maker  An initial driver of the surge in BTC Numbers on the ethereum network, Maker  Added WBTC as DAI collateral in May this year. While WBTC has reached its 10 million DAI debt ceiling, the number of new BTC locked in Maker is at a low ebb.

But that won't last long, as MKR holders will likely vote in the next few days to double WBTC's debt ceiling, and more BTC will be sucked into Ethereum and its decentralized reserve bank.

Another driver of the recent surge in BTC Numbers on Ethereum is NBSP; Balancer, the liquidity and asset management agreement launched in early June with the introduction of liquidity Mining & NBSP; (yield farming). Since June 1, up to 1,660 BTC has been sucked into the Balancer agreement, valued at approximately $15 million.

Growth trend of BTC in Ethereum network

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A huge prize & NBSP;

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The ultimate player behind Ethereum's attraction to BTC is NBSP; Curve, an automated market maker (AMM) protocol, is known for its highly efficient trading of stability COINS. The growing automated market maker has recently launched a NBSP; BTC trading pools, which contain three main BTC forms, including WBTC, RenBTC, and sBTC.

[Note: WBTC  co-launched by BitGo, KyberNetwork and Ren and other blockchain projects, token anchoring BTC based on Ethereum network; renBTC  token anchoring BTC based on Ethereum issued by Ren Protocol; sBTC  synthetic asset anchoring BTC based on Ethereum issued by SNX pledged on Synthetix platform.]

The BTC trading pool of Curve is interesting in its potential liquidity mining incentives. Curve, in collaboration with Ren Protocol and Synthetix, provides one of the most complex multi-asset liquidity mining games to date in the DeFi ecosystem. Users who provide BTC liquidity to Curve will receive not only transaction fee income, but also SNX, REN, BAL and CRV rewards. As a result, the BTC pool quickly accumulated nearly $16 million worth of BTC in just a few weeks after its launch.

The common theme is that of fluid mining & NBSP; (yield farming). The incentive to earn tokens for local agreements is too tempting. People just can't resist using their spare BTC to earn such huge rewards, which typically range from 30% to 100% annually.

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The BTC battle over Ethereum & NBSP;

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As far as the BTC on Ethereum is concerned, WBTC currently dominates, accounting for about 78% of the total AMOUNT of BTC on Ethereum. But the introduction of the RenVM product of Ren Protocol has brought a new fighter into the arena: renBTC.

[Note: Ren Protocol is a cross-chain DeFi project based on Ethereum, its virtual machine & NBSP;RenVM enables cross-chain decentralization and trust-free exchange of cryptocurrency assets.]

Ren Protocol launched its distrusted cross-chain hosting platform & NBSP; in early June this year. RenVM has contributed to nearly $10 million worth of BTC  in the past month. Enter the Ethereum network. As a result, renBTC now accounts for 10% (and growing) of all BTC circulating on Ethereum. The reason behind this increase, as noted above, is NBSP; Curve  Introduced its BTC multi-asset liquidity mining incentive mechanism, as well as NBSP; WBTC. Cafe  The latter is a decentralized application (DApp) provided by Ren that allows users to exchange BTC for WBTC directly.

RenBTC has become the dominant untrusted BTC on Ethereum as Keep Network'S tBTC struggles to get online on the main Network. The only thing missing from renBTC is broad integration across DeFi protocols, which is largely dominated by WBTC. However, as Ren continues to demonstrate its trustworthiness, more DeFi protocols will likely support renBTC in the future.

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WBTC and RenBTC crowded out their competitors.

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With the exception of WBTC and RenBTC, all other BTC forms on Ethereum are losing market share. The next closest competitor is NBSP; HBTC  And & have spent ImBTC, respectively, accounted for 6.38% and 5.44% of BTC circulation on Ethereum. See below.

Although & have spent ImBTC  Initially relatively popular as an alternative to WBTC, its market share has fallen from 40.8% to 5.44% since the beginning of the year. In addition, hBTC  It has stalled because Huobi's hBTC has been idle at 710 BTC since its launch at the end of February.

It is becoming increasingly clear that BTC as an asset is no match for ethereum's gravity. The potential for using BTC in the DeFi protocol is very strong. Now, because liquid mining offers very high passive yield opportunities, the BTC has no chance to escape, although the risks are sometimes high.

BTC on Ethereum was a big event and a trend. There is no denying it. The question now 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 amount of BTC on Ethereum be more than the amount on the Bitcoin network? It seems crazy even to think about it.

But only time will tell.

Text link:https://mp.weixin.qq.com

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