Ethereum becomes Bitcoin's largest "sidechain"? BTC anchor coins approach 150,000

This article is from Bitcoin.com, original author: Jamie Redman

Translator: Odaily Planet Daily Moni

According to the latest on-chain statistics, the number of Bitcoin tokens locked on the Ethereum blockchain is increasing. So far, there are approximately 141,231 Bitcoins locked in Ethereum-based anchor coins, with a value of approximately US$3.3 billion. Among them, there are approximately 7 different wrapped Bitcoins or synthetic Bitcoins. Wrapped Bitcoin has the largest anchor amount, currently approximately 115,411.

At the time of writing, most of the released Wrapped Bitcoin and Synthetic Bitcoin are locked in the Ethereum network, totaling about 141,231 BTC. The largest Wrapped Bitcoin project is WBTC, an ERC-20 token. On December 21, Beijing time, Bitcoin-pegged coin WBTC ranked first in DeFi lock-up for the first time, with a total lock-up of $2.8 billion. The second-ranked Maker locked up $2.6 billion. The 3rd to 5th DeFi projects/protocols are: Uniswap ($1.9 billion), Compound ($1.9 billion) and Aave V1 ($1.7 billion).

Bitcoin-pegged coins are a special type of token issued on a non-Bitcoin network whose price is anchored to native Bitcoin. WBTC is BTC jointly issued by Kyber, RenProtocol and BitGo, and is pegged 1:1 to real Bitcoin. The current issuance of WBTC tokens is 115,631.

According to Dune Analytics data (as shown above), the six projects under the Bitcoin anchor currency currently have a total of 28,151 BTC (worth up to $677.7 million), including renBTC (17,122), hbtc (6,010), tbtc (1,906), sbtc (1,903), imbtc (1,035) and pbtc (175). Compared to transferring native Bitcoin, the cost of transferring Wrapped Bitcoin and Synthetic Bitcoin is much lower, because the current median transaction cost per transaction on the Ethereum chain is only $0.54, the next block fee of the Bitcoin network is $7.68 per transaction, and the current median transaction cost per transaction is $3.71.

A large amount of Wrapped Bitcoin and Synthetic Bitcoin on the Ethereum blockchain are mainly used by decentralized exchanges (DEX) and token loan platforms that generate high interest. In the past 7 days, the token exchange amount of ETH-based decentralized exchanges (such as Uniswap and 0x) has reached $5.5 billion, and the exchange amount in the past 24 hours has reached $579 million.

WBTC currently ranks sixth in terms of ERC-20 asset lending share; in terms of outstanding loans per asset, there is currently approximately $45 million worth of WBTC available for lending.

From this trend, it can be seen that the number of Bitcoins gathered on the Ethereum network is increasing. At the end of September, the nominal asset size of tokenized Bitcoins on the Ethereum blockchain exceeded US$1 billion. However, in the past three months, the price of Bitcoin has skyrocketed by 129%, which may also be one of the reasons for the increase in asset size.

Despite some problems, at least for now, Ethereum is still the largest sidechain of Bitcoin. The number of Bitcoin-pegged coins on other competitors' chains is very small. For example, Blockstream's Liquid network has only issued 2,599 LBTC, and the circulating supply of the RSK sidechain is only 541 rbtc.

What do you think about the fact that there is $3.4 billion worth of Bitcoin on the Ethereum network today?