ETF issuer 21Shares’ parent company on Tuesday announced the launch of its own “wrapped” Bitcoin token on the Ethereum blockchain.
21.co said that its latest product—dubbed 21BTC—aimed to “usher in the next phase of decentralized finance (DeFi) and to help enable DeFi’s broader adoption.”
You may have heard of “wrapped Bitcoin” and wrapped tokens—how do they work?
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A wrapped token allows one cryptocurrency to be used on another blockchain. The biggest example is Wrapped Bitcoin (WBTC), the 14th largest cryptocurrency, with a market cap of $8.8 billion. Meant to represent Bitcoin, it runs on Ethereum, the second biggest crypto network and the hotspot for DeFi and NFTs.
WBTC allows traders who want to use their Bitcoin holdings in the Ethereum ecosystem to do so with tokens that are one-to-one backed by Bitcoin. It’s how Bitcoin holders can interact with DeFi tools without spending more money on Ethereum or other Ethereum-based tokens.
An important “wrapped” token nearly unraveled last week—the latest crypto product to be hurt by the fallout of the once-dominant FTX exchange which collapsed earlier this month.
For those who don’t know, Wrapped Bitcoin (WBTC) is the 23rd largest cryptocurrency, with a market cap of $3.5 billion. It runs on Ethereum, the leading blockchain for DeFi and NFTs, and is a token that is meant to represent Bitcoin.
The idea—mostly—with WBTC is that traders who want to use their Bitcoin holdings in th...
The token is an important tool in the world of DeFi—crypto products that allow their users to borrow, lend, or trade digital assets without third-party intermediaries. In the past 24 hours, over $127 million in WBTC tokens traded hands, according to CoinGecko.
Other entities have cottoned on and are releasing their own institutionally backed versions of tokens—including 21.co’s announcement today.
“21BTC offers the ability for users to make use of Bitcoin’s liquidity, but on the Ethereum DeFi ecosystem,” 21Shares Head of Strategy and Business Development, Digital Assets Eliézer Ndinga told Decrypt. “This is of vital importance for various DeFi applications from lending platforms to decentralized exchanges.”
But the wrapped Bitcoin craze isn’t without controversy: BitGo, WBTC’s custodian, announced last month it was teaming with Hong Kong-based BiT Global to “diversify custody operations and cold storage across multiple jurisdictions” for the token.
The move attracted some criticism because of BiT Global’s ties to crypto entrepreneur Justin Sun. Bitcoin DeFi protocol Threshold—which mints a Bitcoin-wrapped token, tBTC—even proposed a merger with WBTC to “save” it.
Sun spoke out about the controversy last month and said his involvement was “entirely strategic.”
Recently, I've heard that the community has some concerns about my involvement in various projects, including WBTC. I would like to clarify the following points:
There have been no changes to WBTC compared to before. The audits are conducted in real-time and can be accessed via…
— H.E. Justin Sun🌞孙宇晨(hiring) (@justinsuntron) August 10, 2024
And America’s biggest crypto exchange, Coinbase, last month said it would launch a tokenized version of Bitcoin, cbBTC, on its Base network.
Regardless of the controversy, one thing is certain: there is demand for the biggest digital asset by market cap on other blockchains, and well-established firms like 21.co are eager to join the fray.
Bitcoin is widely considered the most secure and decentralized digital asset. But for all its strength as a store of value, it’s historically offered little financial utility due to network limitations, while its ballooning price has kept it from being seen as everyday spending money.
Bitcoin DeFi, also known as BTCfi—a term referring to decentralized finance applications built on Bitcoin—is emerging to change that. Sui is one of several layer-1 blockchains now supporting Bitcoin-based functiona...
The price of several tokens tied to Ethereum-based projects in decentralized finance, or DeFi, spiked on Tuesday after the Securities and Exchange Commission signaled that it’s taking steps internally to become more accommodative of the emergent subsector.
Ethereum was recently changing hands around $2,700, an 7.2% increase over the past day, according to crypto data provider CoinGecko. Uniswap, Aave, and Sky, were up 23%, 16%, and 15% respectively, rising to $8, $305, and $0.90.
On Monday, SEC...
Layer 1 blockchain and smart contract ecosystem Nibiru has launched Block Party, a points program designed to reward real user participation across its DeFi ecosystem.
Participants can earn Aura by interacting with applications on Nibiru EVM through trading, liquidity, lending, or quests.
WEN? 🔥 Introducing Nibiru Block Party launching this summer, a points program rewarding you with Aura for swaps, liquidity, lending & quests powered by @merkl_xyz and @galxe 🧵 pic.twitter.com/uDAnrohiYC
— Ni...
