As of October 11, 2020, there are 131,455 Bitcoins locked on the Ethereum platform.
By “locking Bitcoin onto the Ethereum platform,” we mean BTC that is wrapped onto Ethereum. One example of such a wrapped token is Wrapped Bitcoin (wBTC) which holds 73% of all wrapped Bitcoin on Ethereum. Another common form of Bitcoin on Ethereum is renBTC.
Wrapped Bitcoin, the most popular way to use Bitcoin on Ethereum
wBTC, in particular, has a large number of notable backers including Kyber, Swipe, and Airswap.
wBTC adds additional assets to the Ethereum ecosystem to be used with products such as decentralized trading systems (DEXs) and financial apps. As most of today’s Bitcoin activity takes place on centralized exchanges, wBTC allows DEXs to also implement Bitcoin trading.
In addition, wBTC standardizes Bitcoin onto the ERC-20 format, encouraging the creation of smart contracts that implement Bitcoin transactions.
Bitcoin entering the DeFi Arena
Many Bitcoin holders are wrapping their Bitcoin in Ethereum in order to participate in the DeFi boom, as most DeFi products launch on Ethereum first. DApps such as loan protocols, yield farming products, and NFTs have become very popular on the Ethereum platform.
In addition, the amount of Bitcoin wrapped onto Ethereum dwarfs the amount of Bitcoin locked onto Bitcoin’s own Lightning Network. This implies that Bitcoin users are more interested in participating in Ethereum powered DApps than on Bitcoin-specific protocols.
This is in spite of the recent pullback on DeFi coins starting with September. Bitcoin itself has steadily risen in the past week, increasing around 7% in the past week.
