Amount Of Bitcoin Locked In WBTC Triples As Capacity To Surpass Lightning Network Soon
Amount Of Bitcoin Locked In WBTC Triples
Wrapped Bitcoin (WBTC), a token created on the Ethereum network, has been gathering momentum over the last few days. In the last 24 hours, the number of WBTC tokens locked in the Kyber Network has grown almost three fold. This brings the total amount of Bitcoin locked in the protocol to 550 Bitcoin which is worth close to $6 million.
The token was launched in 2018 and it is widely regarded as one of the most intriguing projects in the crypto industry. The token was created in a partnership between Bitgo, Kyber Network and Ren. The entities combined to create an ERC20 token which is backed by Bitcoin at a 1:1 ratio.
This token is the first of its kind and it is designed to bring liquidity to the Ethereum network. Through WBTC, funds held in Bitcoin can be used in any applications on the Ethereum network. Loans and token payments can be facilitated using the token and the most WBTC activity has been seen on the Kyber Network which was one of the first two merchants to distribute the token.
WBTC could also affect the overall price of Bitcoin. By locking up Bitcoin coins on the networks that use WBTC, the amount of Bitcoin in circulation is reduced. If the supply of Bitcoin grows smaller, the cryptocurrency responds by increasing in value as has been shown in Bitcoin halving.
Although the current amount of locked Bitcoin in WBTC isn’t enough to cause this price rise, the growth trajectory of WBTC shows that it might come to be in the future. WBTC has only been on the market since January and by May, it had reached a million dollars. Since April, WBTC has seen the amount of BTC added to it grow by 272%. In July alone, there has been a 70% increase in the amount of Bitcoin locked in the network.
The Appeal Of WBTC
The sudden and massive growth of WBTC reserves has stakeholders in the crypto industry on high alert. Recent news about the protocol may have influenced the recent increase. Compound, a crypto lending protocol for DeFi, announced that it has added WBTC on its list of offerings. Compound’s decision to add WBTC apparently came after there were several requests from its users asking that the ERC20 token be added to the list of offerings. Users of Compound are now able to borrow and earn interest on WBTC. More $32,000 worth of WBTC had already been issued as loans on Compound.
There are other exchanges that have also launched WBTC on their platforms. Switcheo is one such exchange and Jack Yeu from the exchange said that traders are able to buy and sell NEO using BTC pegged tokens in reference to WBTC. These offerings plus the liquidity that comes with WBTC will most likely influence the further growth of the token. The future of WBTC is an interesting prospect and crypto traders will be keeping a close eye to see how the token does going forward.