According to Messari, projects bringing Bitcoin to DeFi will emerge as leaders of the crypto sector.
$500 million worth of Bitcoin (BTC) has been tokenized on the Ethereum network for decentralized finance (DeFi) protocols. This has been estimated by the crypto analytics firm Messari. However, the firm’s latest report points out that this figure represents just 0.3% of Bitcoin’s $216 billion market cap. This means there is ample opportunity for projects that facilitate the migration of Bitcoin onto Ethereum. It will help to capture significant value.
Bitcoin tokenization protocols RenVM and WrappedBTC (WBTC) are the ninth and 10th largest DeFi projects by locked funds. They are with $453 million and $232.4 million, respectively. Ren has seen high use over the past month. The value of funds locked in the protocol has gained nearly 470%. It has gone from $40.9 million at the start of August. Coinbase is also reviewing Ren to add to its platform. WBTC also absorbed $274 million in the capital last month, increasing the value of its locked funds by 157%. During August, the number of Bitcoins being tokenized via WBTC briefly exceeded the rate at which new BTC is mined. This signposted booming demand for Bitcoin in the DeFi space. Messari tweeted the report’s findings. It tagged Keep Network (tBTC) alongside Ren (renBTC) as major project bringing BTC to Ethereum.
The inclusion of releaseKeep was noted as unexpected. A vulnerability in the code of Keep’s trustless Bitcoin tokenization protocol tBTC was identified in May. This resulted in the project going offline just two days after launching Buter. The second version of tBTC will be released by TBTC. This will be done after an additional round of security audits and testing. It has been distributing its work token KEEP via a stake drop since June.
Many smaller projects have also entered the Bitcoin tokenization space over recent months. This includes PieDAO’s BTC++ pool attracting 58 Bitcoin since launching in April.