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More Wrapped Bitcoin was created in past week than amount of Bitcoin that was mined by miners

According to data from Dune Analytics and CoinMetrics, the number of Wrapped Bitcoin on Ethereum, also known as WBTC, is increasing sharply. This shows a rapid increase in users using WBTC over DeFi protocols.

WBTC is a token that hô the value of Bitcoin launched on the mainnet of Ethereum in early 2019. Various companies, including Compound, MakerDAO, Ren, and Dharma, to the launch of WBTC.

The number of Wrapped Bitcoin on Ethereum is surging

Crypto analyst Zack Voell reported the following:

“The bond of WBTC surpassed the amount of Bitcoin mined since August 9.”

The data coincides with a significant spike in the total locked value across DeFi protocols. Over the past week, the amount of capital locked up in DeFi platforms has grown from $ 4.55 billion to $ 5.95 billion, almost $ 1.5 billion.

Since users cannot directly transfer Bitcoin to Ethereum Blockchain, users first convert Bitcoin to WBTC, then use the DeFi platform with it.

Demand for WBTC has increased in recent weeks as user activity in the DeFi space has increased significantly. The emergence of new projects and an overall increase in awareness have caused both the DeFi ecosystems and the WBTC to develop in parallel.

Loong Wang, Ren’s technical director, said:

Max Bronstein, the head of the organizational branch and venture at Coinbase, explained that users are holding BTC on Ethereum due to various incentives.

For example, Bronstein points out that participants in the Curve Finance platform get paid more than 1% a day for long-term Bitcoin.

He said:

“The opportunity cost of not holding BTC on Ethereum is incredibly high; participants in the sBTC pool on Curve Finance are being paid over 1% a day to be long Bitcoin.”

more-wbtc-was-created-in-the-past-week-than-the-amount-of-bitcoin-that-was-mined-by-miners

DeFi incentives for holding Bitcoin are contributing to the growing demand for the WBTC. There are many other types of assets in the DeFi ecosystem that represent Bitcoin’s value, but the WBTC remains the largest.

But some analysts are still skeptical of the long-term trend of the WBTC. Joseph Todaro, head of research at TradeBlock, said he doesn’t see any compelling cases for the WBTC in the long run.

He explained:

In the short term, the expanding DeFi market increases demand opportunities for WBTC. In the long term, whether this trend is sustainable or not is still uncertain.

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