Research published by cryptocurrencycryptocurrency data firm Messari today shows that more than half a billion dollars worth of BitcoinBitcoin, or 0.3% of its total supply, has been sent to EthereumEthereum this year. The reason? This summer’s indomitable rise of decentralized financedecentralized finance, or DeFi.
“With only 0.3% of all bitcoin on Ethereum and DeFi booming, the opportunity for decentralized bridges between the two chains is hard to ignore,” tweeteth Messari.
$500M worth of #Bitcoin has been ported over to Ethereum in 2020
With only 0.3% of all bitcoin on Ethereum and DeFi booming, the opportunity for decentralized bridges between the two chains is hard to ignore. $KEEP$RENpic.twitter.com/tLGWlaIuFZ
Messari’s talking about DeFiDeFi, crypto’s hot new thing that boomeranged the crypto market out of its coronavirus shutdown. DeFi refers to things like non-custodial loans platforms—think of them like automated banks—and tokens that track stocks. Just over $9 billion is locked up in its smart contracts today, according to DeFi Pulse, an increase of $8 billion (yes, basically all of it) in under three months.
The vast majority of the DeFi industry lives on Ethereum. Messari’s point, which it expounded upon in a blog post, is that Bitcoiners are moving their funds into Ethereum to join in the fun.
That’s because you can’t just...use Bitcoin on Ethereum-based DeFi protocols. To participate, Bitcoiners must first lock their Bitcoin into smart contracts that give them Ethereum-based tokens that represent that Bitcoin, ready for them to fritter away on various DeFi protocols.
A couple services exist. Silicon Valley prime brokerage firm BitGo’s offering, WrappedBTC, launched last January. That’s a custodial service, meaning that you’ll have to entrust BitGo with your money. There’s $456 million in its smart contracts, per metrics site Coin Gecko.
Wrapped Bitcoin WBTC isn’t the only Bitcoin-to-Ethereum value transfer taking DeFi by storm.
Ren project’s renBTC has seen a nearly 200% increase—from $59 million to more than $176 million—in locked BTC transferred to the Ethereum blockchain since August 13, according to data collected from DeFi Pulse.
👀 @renprotocol sure had a good weekend. It jumped from ~$59M to $172M TVL https://t.co/kT0CnhrszU pic.twitter.com/rVpEwpjTmy
— DeFi Pulse 🍇 (@defipulse) August 17, 2020
The substantial increa...
DeFi-native protocols exist but they are very new—getting blockchains to work with one another in a non-custodial manner is still a huge challenge in the industry.
DeFi firm Keep has a ETH-based Bitcoin, tBTC. But that went offline just days after it launched in May 2020 after a bug was found in its code. On August 17, the team said that an audit was completed about two weeks ago and that it should come out in the next couple of weeks.
Ren’s protocol, however, is live. To date it has “facilitated more than $380 million in volume between chains,” said Messari’s Ryan Watkins in his post.
Still, 0.3% of Bitcoin is about $664 million, according to today’s prices. But Bitcoin’s entire market cap is $221 billion. DeFi’s hot, but not that hot.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
Plasma is preparing to launch its own neobank, Plasma One, sometime after its stablecoin blockchain hits mainnet later this month. Its card claims it will offer 4% cash back on spending, an over 10% yield on balances, and international coverage.
Users of Plasma One will be able to load their card with the stablecoins of their choice—starting with USDT and slowly expanding—and then pay directly from this balance via the physical or virtual card. The prepaid credit card is set to use the Plasma bl...
Prediction markets and decentralized autonomous organizations, or DAOs, may be closer cousins than most people think, according to Syndicate co-founder Ian Lee.
There are strong similarities between the two, as both are fundamentally about blending social behavior and money, despite what terms suggest, he told Decrypt. (Disclosure: Decrypt’s parent company, DASTAN, operates a prediction market called Myriad.)
“In the abstract, [DAOs are] about coordinating human capital and financial capital at...
A lending product unveiled by Coinbase that offers up to 10.8% returns on USDC deposits is receiving a temporary boost from DeFi lender Morpho.
On X, Coinbase Head of Consumer and Business Products Max Branzburg said on Thursday that around 6% of the product’s returns stem from activity that takes place on Morpho’s platform, while an additional 5% is being “boosted” by the protocol itself.
In a statement to Decrypt, a Coinbase spokesperson confirmed that Morpho is currently augmenting the lendin...
