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β° Time Stamps β°
1:35 What is WBTC?
4:33 How Does it Work?
7:40 Helping Bitcoin Scale
9:04 Using it in DeFi space
11:33 WBTC Growth
13:30 How it Helps ETH
14:20 Concerns About WBTC
16:26 Conclusion
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πΊ Recommended Videos πΊ
βΊ Ethereum 2.0: https://www.youtube.com/watch?v=A9e2wRsQiao
βΊ Kyber Network: https://www.youtube.com/watch?v=YPF7XJDBWRo
βΊ Uniswap: https://www.youtube.com/watch?v=GREUQeHpQeQ
βΊ DeFi Overview: https://www.youtube.com/watch?v=Vq1bxcoW1jQ
βΊ Compound Finance: https://www.youtube.com/watch?v=FUhlxX0pYQo
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βοΈ π Useful Links π βοΈ
βΊ WBTC Website: https://wbtc.network/
βΊ BitGO Website: https://www.bitgo.com/
βΊ Kyber: https://kyber.network/
βΊ Uniswap: https://uniswap.exchange/swap
βΊ Compound: https://compound.finance/
βΊ Aave: https://aave.com/
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π° Sources π°
βΊ WBTC on Kyber: https://medium.com/dappradar-com/how-wrapped-bitcoin-trading-is-evolving-on-kyber-2a63666a3e8e
βΊ Atomic Swaps: https://blockgeeks.com/guides/atomic-swaps/
βΊ WBTC on Kyber: https://medium.com/dappradar-com/how-wrapped-bitcoin-trading-is-evolving-on-kyber-2a63666a3e8e
βΊ WBTC Leads Lightning: https://cointelegraph.com/news/1000-wbtc-minted-today-on-ethereum-dwarfs-entire-lightning-network
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π What is WBTC? π
Itβs tokenized Bitcoin. Its Bitcoin that has been converted into an ERC20 asset on the Ethereum blockchain. Each WBTC token is backed 1 for 1 with a physical bitcoin.
The real benefits of WBTC is that it allows you to access and leverage the Ethereum blockchain with your Bitcoin. It allows you to trade Bitcoin in a completely decentralised and trustless way.
There are 4 types of participants on the WBTC network. They are:
β The custodian who holds the assets (BitGO)
β The merchants who mint and burn the WBTC tokens (Kyber / REN)
β Users like you and me that want to mint or redeem that WBTC
β The DAO which is the governance component which selects merchants or custodians (members)
Each of these have a unique roll in upholding the WBTC network.
π Helping Bitcoin Scale π
The first benefit that you will note is how easy and cheap it is to send WBTC over physical Bitcoin. Given that this leverages the Ethereum blockchain, you have a much less bloated network to transfer assets.
Ethereum 2.0 is also around the corner. With the introduction of Proof of stake and sharding, the hope is that these throughput numbers will skyrocket.
β‘οΈ Defi Benefits β‘οΈ
The next benefit is it allows Bitcoin users to take part in the DeFi ecosystem. They can mint a token that is valued like their Bitcoin.
You can now trade Bitcoin in a completely decentralised way. Through Dexβs like the Kyber Network and Uniswap, you can trade Bitcoin vs. other assets without having to rely on a centralised exchange. You can also trade Bitcoin with leverage against USDT through the use of the DDEX exchange.
You can also utilise your wrapped Bitcoin to earn interest on one of the lending protocols such as Compound or Aave. So, you can generate returns on your BTC without sacrificing your upside.
You could also get involved with funding a liquidity pool over at Uniswap. Or, you can use WTBC in tokensets to adjust your portfolio in a programmatic way.
π€ Is it Working? π€
This most recent jump in the amount of WBTC was due to the announcement by the Maker Protocol that WBTC could now be accepted as collateral. This actually saw WBTC become the second most valuable collateral in the Maker ecosystem.
You have the Kyber Network that has reported that WBTC is one of the fastest growing coins on their protocol showing an increased average trading volume in May of 31% compared to April 2020. This actually saw WBTC overtake other Bitcoin layer 2 scaling solutions such as the much-touted lightning network.
π€ Concerns About WBTC π€
Perhaps the biggest one that I have seen (especially from those in the Ethereum community) is that of centralisation and trust.
Technically, Wrapped Bitcoin is still held by one custodian. They are a central point of failure that many in the crypto community take issue with.
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π Disclaimer π
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.
#Bitcoin #Ethereum #WBTC #crypto #Review #scaling #ETH #defi #blockchain #trading
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