In a weblog put up of Friday, Binance re-introduced BTCB to the world — a wrapped Bitcoin asset meant to carry liquidity from the world’s largest cryptocurrency, BTC, to Binance Sensible Chain’s DeFi (decentralized finance) ecosystem.
Nonetheless, hodlers could also be cheering the renewed curiosity in BTCB for a distinct motive: every Bitcoin locked on BSC might contribute to a looming BTC provide disaster.
First introduced final 12 months, Binance initially noticed wrapped Bitcoin solely as a automobile for merchants to acquire cross-chain asset publicity with out leaving BSC. Since then, nevertheless, the utility of wrapped Bitcoin has boomed as a result of precocious maturation of the DeFi ecosystem.
As an illustration, WBTC — a wrapped Bitcoin token on Ethereum — has loved large success since its January 2019 launch: it at present ranks because the #14 cryptocurrency by marketcap, and has discovered important adoption in protocols corresponding to Aave and Uniswap, whose contracts each rank among the many top-10 holders of WBTC.
Of their weblog, Binance famous that comparable adoption could also be attainable for BTCB. The wrapped Bitcoin might be used to mint stablecoins with BSC-native protocols corresponding to QIAN and Venus; as collateral for lending protocols corresponding to CREAM; and in yield farming and liquidity mining protocols corresponding to Beefy, Bakery, and Pancake.
In line with what Binance calls a “Proof of Property” web page, there are at present over 9,600 Bitcoin on BSC — over $181 million value. Nonetheless, the weblog put up specifies that solely 2,000 are circulating.
Different good contract-enabled chains intend to compound the rising shortage. Solana’s cross-chain Wormhole challenge will flip ERC-20 tokens into SPL tokens, together with WBTC, and likewise, Interlay is utilizing help from a Web3 Basis grant to construct a trustless bridge bringing wrapped Bitcoin to Polkadot. Interlay will launch in early 2021.
Notably if the success of wrapped and cross-chain Bitcoin property proceed to develop, establishments trying to hoover the BTC provide could be confronted with mounting shortage. Aaron Wright, the co-founder of OpenLaw, pointed to such a attainable future in a Tweet:
0.6%+ of Bitcoin is now wrapped and being put to work on Ethereum (and rising).
What occurs when it hits 10%? pic.twitter.com/4dGT0yXHBP
— Aaron Wright (@awrigh01) November 17, 2020