Connect with us


More than $1B in Bitcoin has been tokenized for DeFi



More than $1 billion worth of Bitcoin (BTC) has now been tokenized to access decentralized finance (DeFi) protocols on the Ethereum (ETH) network. That’s equivalent to the entire total value locked (TVL) in DeFi less than four months ago.

According to DeFi Pulse, roughly 98,300 BTC, worth $1.05 billion, has been tokenized using protocols other than Blockstream’s Lightning Network — equating to more than 12% of the DeFi’s sector’s $8.57 billion combined capitalization.

Number of Bitcoins locked in DeFi protocols: Defi Pulse

The milestone illustrates the increasing popularity of ETH-based protocols for generating passive returns among Bitcoin hodlers, with the entire DeFi sector having been valued at just $1.05 billion TVL as of the start of June — of which $47.5 million or 4.7% was Bitcoin, indicating that the share of DeFi’s capitalization represented by BTC has increased by 150% over three and a half months. 

By contrast, the Lightning Network has only attracted 1,100 Bitcoin worth $11.5 million since launching during March 2018.

In June, the vast majority of BTC in the DeFi sector took the form of Wrapped Bitcoin (WBTC), However, the launch of Ren’s more decentralized Virtual Machine (VM) and RenBTC in addition to grassroots tokenization protocols like PieDAO’s BTC++ this year have boosted Bitcoin’s expansion into DeFi.

Bitcoin tokenization protocols let users lock up their Bitcoin and mint an corresponding ERC-20 token — allowing the value represented by a user’s Bitcoin holding to interact with smart contracts on the Ethereum network.

While WBTC is still the top-ranked tokenization protocol by total BTC locked after attracting 56,800 Bitcoin worth nearly $605.5 million since late-November 2018, Ren’s VM has tokenized 21,500 Bitcoin worth $230 million since launching in May of this year.

Number of Bitcoins tokenized by WBTC: DeFi Pulse

While both protocols have more than doubled in the number of locked Bitcoin over 30 days, WBTC continues to attract a larger volume of BTC than Ren — with WBTC growing from roughly 28,360 BTC to 56,850 BTC, and RenBTC expanding from 10,000 BTC to 21,510 over one month.

Over the past 90 days, both projects have grown by more than 850%. On June 19 WBTC represented only 5,839 BTC and Ren had tokenized just 155 BTC.

Number of Bitcoins tokenized by Ren: DeFi Pulse

Curve Finance is the top-ranked yield generating protocol by tokenized BTC with 27,600 Bitcoins worth 295 million, followed by Aave with 17,800 BTC worth $190.5 million, and Balancer with 9,500 BTC worth 101.6 million. Collectively, the three protocols have attracted more than half of all tokenized Bitcoin.

However, with only 0.47% of Bitcoin’s supply tokenized, there is still significant value that will likely migrate from Bitcoin into DeFi over the coming months and years.

Source link


How cross-chain liquidity aggregation can shape the future of DeFi




As decentralized exchanges now represent a significant amount of crypto trading volume, it is vivid that these platforms will play a big role in the smart economy of the future.

Automated market makers, in particular, changed the game by eliminating the need for order books entirely and replacing them with liquidity pools. This model was a win-win for both traders executing swaps and liquidity providers incentivized to supply their tokens and earn fees from traders.

Even the sporadic liquidity issues on DEXes, brought about by a sometimes fragmented marketplace, were addressed by the emergence of DEX aggregators – platforms that would essentially pool together fragmented liquidity onto a single platform.

For the most part, however, these DEX aggregators are limited to connecting liquidity pools on Ethereum. This obviously limits the level of multi-chain accessibility actually possible while trading on a DEX. Moreover, as things stand, trading volume on DEXes still pales in comparison to most centralized exchanges.

And while Ethereum might be the most prominent network in the industry, it isn’t for everybody. It is no secret that network congestion and the lack of scalability have caused high transaction fees on Ethereum.

Traders have looked to Layer 2 solutions and sidechains such as Binance Smart Chain, HECO, and Polygon as alternatives, but the transaction barriers between them still limit their choices considerably.

In some instances, the convoluted nature of actually performing a trade coupled with these liquidity issues has driven DeFi traders right back to centralized exchanges.

Clearly, interoperability between blockchains is the need of the hour. Cross-chain liquidity aggregators address these issues prevailing on decentralized exchanges by aggregating liquidity sources from various DEXs across chains and their own cross-chain pools.

O3 Swap is one such cross-chain DEX aggregator that works on expanding available token markets and increasing liquidity and trading volumes, easing cross-chain transactions for users all around.

O3 Swap describes itself as the first cross-chain aggregation protocol that enables free trading of native assets between heterogeneous chains by deploying ‘aggregator + asset cross-chain pool’ on different public chains and Layer 2 granting users access to cross-chain transactions with one click.

The project sees the future of DeFi as multichain co-existence. For the moment, it supports Ethereum, BSC, HECO, Polygon, and NEO cross-chain transactions and four cross-chain pools: USD Pool (ERC20-BEP20-HRC20), ETH pool (ERC20-BEP20-HRC20), BTC Pool (ERC20-BEP20-HRC20), and USDC Pool (ERC20-BEP20-Polygon).

With the use of special algorithms, cross-chain DEX aggregators identify the most optimal routes to fulfill trade orders across blockchain ecosystems. This important functionality will not only ease the burden of existing DeFi users but also remove some of the barriers to entry for newer market participants.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Source link

Continue Reading


NFTs are next for enterprise Ethereum, says ConsenSys founder Joe Lubin




Nonfungible tokens, or NFTs, are known by the mainstream as digital assets that represent real-world objects such as art, music and fashion, among others. Yet, while most of the world may be enamored by the high selling prices of NFTs launched by celebrities, athletes and other famous individuals, nonfungible tokens are starting to pique the interest of corporations for business use cases.

Enterprises embracing NFTs was a point discussed during the Enterprise Ethereum Alliance, or EEA, anniversary event that took place virtually on July 29, 2021. During a keynote session, entitled “The future of Ethereum and Web3,” Joe Lubin, CEO and founder of ConsenSys — a blockchain software company — mentioned that “NFTs are doing a tremendous job of getting enterprises excited.”

Following the EEA event, Lubin told Cointelegraph that from a broader perspective, NFTs have become a revolution that will transform how the software will be built and delivered:

“We’re now moving into a world where we have these nonfungible software objects that have unique identities that can actually accept money, pay money and can participate in governance, either in decentralized autonomous organizations or potentially other kinds of governments that can govern themselves.”

As such, Lubin believes that NFTs won’t just encapsulate content through digital artwork or music, but that nonfungible tokens will eventually evolve into entire businesses with their own rights.

The future of NFTs for enterprise use

Although Lubin is very much aware that self-governing NFTs will be a profound transformation, he explained that artists and content creators who have launched nonfungible tokens have already demonstrated that this technology is capable of solving common business problems:

“NFTs are enabling artists and content owners to recognize that their intellectual property can have different rights and different rates if they wish. These can then be monetized and sold to different people in really flexible and programmatic ways. It’s really about the artist not having to sell their soul to make a living, which is really exciting from the enterprise perspective.”

Specifically speaking, Lubin remarked that every media company in the world is thinking about or is already in the process of launching its own NFT platform. To Lubin’s point, Media Publishares — publishers of Vogue, Esquire and other major magazines — announced a partnership earlier this year with decentralized ad network Vidy to launch and develop an NFT platform for the fashion, art and music industries.

Media Publishares’s nonfungible platform is expected to launch in Q3 of 2021 to enable a virtual environment to showcase digital art, fashion, music and design. The platform will also support the minting, trading and auctioning of NFTs through a tokenized system.

Yet, NFTs are not only poised to disrupt the media industry. Lubin added that traditional financial service sectors shifting toward decentralized finance (DeFi) concepts will also leverage nonfungible tokens. According to Lubin, NFTs are going to be a major part of DeFi going forward since the traditional financial world consists of fungible token shares, deeds and other financial instruments that are uniquely associated with an asset.

This being the case, Lubin explained that a “nonfungible financial world” is a massive opportunity that will likely be centered around automated market makers, stable coin systems and lending/borrowing protocols: “These will look very similar to fungible tokens, but they’ll need to be built somewhat uniquely to accommodate nonfungible tokens.”

Based on this, it’s important to point out that enterprises leveraging a nonfungible financial world will, in turn, solve a major business problem: ensuring that invoices are paid. Dan Burnett, executive director of the Enterprise Ethereum Alliance, told Cointelegraph that just as computers and the internet have helped companies lower costs and increase speeds, Ethereum and blockchain technology are enabling trust for how people will get compensated:

“The whole point of blockchain technology is that we don’t need a trusted human for business processes. Organizations can now set things up not only for how people get paid now, but how people can get paid in perpetuity.”

Shifting from corporations to community

As enterprises begin to apply nonfungible concepts to traditional business models, Lubin further remarked that this demonstrates a shift from an age of corporations to an age of community: “DeFi protocols are about sharing governance. We are going to eventually organize all our business activities in decentralized autonomous organizations.”

Lubin noted that the billion-dollar gaming sector is already demonstrating how NFTs can impact real-world economies. For instance, Lubin mentioned the Ethereum-enabled blockchain project Axie Infinity, which allows players to earn income through nonfungible tokens. In particular, Axie Infinity has had an impact in the Philippines, a region hit hard by the COVID-19 pandemic.

Related: The ethics of hiring cheap Filipino staff: Crypto in the Philippines

The play-to-earn blockchain-based video game has already allowed several Filipino people to earn NFTs and cryptocurrencies by breeding, battling and trading digital pets called Axies. Lubin explained:

“Many of the 350,000 to 400,000 people that are playing the game are living in the Philippines. They are earning income that’s five times what they would be making at minimum wage. They’ve built a real economy and are building a metaverse with property. This is a phenomenon to watch.”

Recent data from Axie World shows that the Axie Infinity virtual environments have a total revenue close to $120 million in July 2021, which is up significantly from the $1.92 million seen at the beginning of this year.

Although impressive, Burnett pointed out that proper regulations are still required in order for nonfungible systems for enterprises to come into fruition: “One of our goals at the EEA is to work with regulators to ensure a proper engagement. This isn’t about shutting down the technology or community, but rather about understanding that the world has changed.”

While regulations are still underway, Lubin optimistically remarked that “the enterprise herd is already coming to the Ethereum mainnet.”