More Bitcoins inside the Ethereum Blockchain than in the Bitcoin’s own chain!!
Defi is definitely hot, when you consider that there is more Bitcoin value locked into Ethereum than on Bitcoin’s lightning network!!
Era of tokenized Bitcoin locked into Ethereum Smart Contracts
WBTC which is wrapped BTC is a ERC-20 token, which represents a BTC token locked into the Ethereum Blockchain. This is made possible with the user’s actual Bitcoins getting deposited with custodian BitGo. From here users can tokenize deposited BTC into WBTC and bring Bitcoins into DEFI projects, to do various DEFI related operations like borrow using their locked BTC as collateral and lend BTC earning interest.
Some Defi projects where WBTC tokens are used - https://wbtc.network/
Bitcoins used more in DEFI projects than for payment settlements
Image by Vadim Taranov from Pixabay
Pretty cool yes. However, right now the value of Bitcoins locked into the Bitcoin Network for use in enabling faster Bitcoin payments through the ‘Lighting Network’ system is 9.0 million, while the value of Bitcoins(WBTC) locked into the Ethereum Network for DEFI purposes and operations is 80.7 million!!
Data taken from https://defipulse.com/
Bitcoin can rise in value thanks to its usage in the Ethereum Blockchain
This only shows that Bitcoin is used most in DEFI space, much more than it is used for making payments. Therefore, Ethereum indirectly adds value to Bitcoin with Bitcoins being locked in Ethereum Blockchain and used, it would definitely have a multiplier effect in the price of Bitcoin don’t you think?
Reference - https://cointelegraph.com/news/lightning-network-proving-less-electric-for-bitcoin-than-promised