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One thousand Wrapped Bitcoin (WBTC) were minted today on the Ethereum network (ETH) —  a single transaction that represents more U.S dollar value than the entire Lightning Network.

It brings the total amount of Bitcoin now locked in WBTC tokens to 2,300, compared to the roughly 927 Bitcoin (BTC) locked on the Lightning Network.

According to decentralised finance data aggregator DeFi Pulse, the USD value of wBTC is $20.7 million, making it the eighth-largest decentralized finance (DeFi) protocol.

wBTC grows alongside DeFi

Wrapped Bitcoin is an ERC-20 token that allows users to access popular ETH-based DeFi protocols using the value represented by their Bitcoin holdings. 

Users’ Bitcoin is held by custodian BitGo, while eight ‘initial merchants’ act as middlemen between the users and the custodian, including Dharma, Kyber, Ren, DiversiFi, Set Protocol, Gopax, AirSwap, and Prycto.

The Wrapped Bitcoin protocol is operated by a decentralized autonomous organization comprising 16 projects including the initial merchants, Compound, and MakerDAO.

BTC can be redeemed by burning wBTC tokens.

ETH-based synthetic BTC protocols proliferate

The recent growth in popularity of DeFi has driven an expansion in the number of DeFi projects offering Bitcoin tokenization on the Ethereum network.

At the start of April, PieDAO launched its first fund, PieDAO BTC++. The fund provides exposure to a diversified basket of synthetic BTC protocols, allowing users to access DeFi using its token while also hedging against failure or the targeting of any single synthetic BTC project. PieDAO BTC++ comprises 25% Wrapped BTC, 25% Synthetix BTC, 25% Provable BTC, and 25% imBTC.

In November 2019, decentralized exchange Tokenlon launched the synthetic BTC protocol imBTC. However, the tokens have recently garnered controversy after being used in attacks targeting Uniswap and DForce last month.

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