More than 100,000 Bitcoin or $1 billion worth of Bitcoin (BTC) has now been tokenized to access decentralized finance (DeFi) protocols on the Ethereum (ETH) blockchain. This amount is about 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 approximately 12% of the DeFi’s sector’s $8.57 billion combined capitalization.
Both WBTC and RenBTC have more than doubled in the number of locked Bitcoin over a month but WBTC is attracting a larger volume of BTC than the other one — with WBTC growing from roughly 28,360 BTC to 56,850 BTC, and RenBTC from 10,000 BTC to 21,510 over one month.
Over the past m months, both projects have expended by more than 850%. On June 19 WBTC represented only 5,839 BTC and Ren had tokenized just 155 BTC.
The increasing popularity of ETH-based protocols for generating passive returns among Bitcoin traders, 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, showing that the share of DeFi’s capitalization represented by Bitcoin has increased by 150% over three and a half months.
On the other hand, the Lightning Network has only attracted 1,100 Bitcoin worth $11.5 million since 2018.
In June, most of BTC in the DeFi sector took the form of (WBTC), However, the launch of Ren’s more decentralized Virtual Machine (VM) and RenBTC in addition to grassroots tokenization protocols such as PieDAO’s BTC++ this year have boosted Bitcoin’s expansion into DeFi.
Bitcoin tokenization protocols let traders 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 November 2018, Ren’s VM has tokenized 21,500 Bitcoin worth $230 million since launching in May.
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. Totally, the three protocols have attracted more than half of all tokenized Bitcoin.
However, only 0.47% of Bitcoin’s supply have been tokenized, so there is still lots of value that will likely migrate from Bitcoin into DeFi over the coming days.