The Battle for BTC on Ethereum

The Battle for BTC on Ethereum

July 3, 2020 Bitcoin Decentralized Finance DeFi Ethereum 0

 

DeFi has become a trending topic in the blockchain community. In contrast to the decentralization of money through Bitcoin, DeFi aims for a broader approach of generally decentralizing the traditional financial industry. The core of the initiative is to open traditional financial services to everyone, in providing a permissionless financial service ecosystem based on blockchain infrastructure.

With the aim of being a part of this revolution, Definity Labs has developed their own decentralized applications Infinity Vest. Infinity Vest is a Worldwide No-loss lottery that appeals to the avid lottery player, AND investor. The decentralized application allows people to buy Vest Savings Tickets for a chance to win at each drawing.

Win this week’s lottery here

 

 

The Battle for BTC on Ethereum 

WBTC currently dominates the market in terms of tokenized Bitcoin as it’s responsible for ~78% of all BTC on Ethereum. But the introduction of Ren Protocol’s RenVM brought a new fighter into the arena – renBTC. 

After launching in early June, Ren protocol’s trustless cross-chain custodian (the RenVM) has facilitated nearly $10M of new BTC onto Ethereum in the past month alone. As a result, renBTC currently comprises almost 10% of all BTC circulating on Ethereum (and rising). As mentioned, one of the reasons behind this growth was the launch of Curve’s BTC multi-asset yield farming incentives along with the launch of wbtc.cafe – a permissionless portal for wrapping BTC on Ethereum via a normal Bitcoin transaction, powered by Ren.

That along with Keep Network’s tBTC struggling to hit mainnet, renBTC has overtaken the narrative for trustless BTC on Ethereum. The only thing missing for renBTC is a wide range of integrations across DeFi protocols, something that is largely dominated by WBTC. However, as Ren continues to flex its trustless muscles, more DeFi protocols will likely support renBTC in the future.

WBTC & RenBTC Crowd Others Out

Outside of WBTC and RenBTC, the other flavors are dwindling in market share. The next two closest competitors are hBTC and imBTC which aggregate for 6.38% and 5.44% of all BTC on Ethereum, respectively.

While imBTC started off as a relatively popular alternative to WBTC, it has lost a significant portion of its market share since the beginning of the year – a decrease from 40.8% down to 5.44%. In addition, hBTC has stagnated as Huobi’s version of wrapped Bitcoin sits idle at 710 BTC in circulation since its launch in late February.

 

 

Bitcoin

Contributor: Nate Maddrey, Research Analyst at Coin Metrics

  • Some interesting trends have emerged as Bitcoin continues to rebound three months after the March 12th crash. Bitcoin daily active addresses (defined as the unique number of addresses either sending or receiving a transaction) are approaching levels not seen since 2018. Active addresses tend to follow price, as seen in the below chart. But in May and June there were several days where Bitcoin had over 1M active addresses, despite price mostly remaining under $10K. The last time Bitcoin had over 1M daily active addresses was July 2019, when price peaked around $11,500. The following chart shows daily active addresses smoothed using a 7 day rolling average (green line, left hand axis) vs. price, USD (red line, right hand axis).

  • While active addresses have been rising, active supply has been falling. Active supply is a measurement of the amount of supply that has moved on-chain within the last X days or years. The following chart shows BTC active supply ranging from 1 day to 5 years. Although short-term active supply (90 day and below) surged in early 2020, longer-term active supply has dropped. Specifically, 1 year and 2 year active supply have both dropped to two year lows. This implies that supply is increasingly being held for periods longer than one year, which supports the narrative that BTC is used as a store of value. About 10.35M BTC have moved on-chain within the last two years, while about 7.4M have moved within the last year.

  • One year active supply percentage paints a similar picture. Looking at active supply as a percentage of total (as opposed to raw active supply numbers) helps account for increases in supply. As of June 23rd, BTC one year active supply percentage (i.e. the percent of supply active within the last year) was about 38.93%. The last time it was under 40% was May 2016.

  • Additionally, Bitcoin realized capitalization has recovered the losses following March 12th and reached a new all-time high of $106.97B. Realized cap is calculated by valuing each unit of supply at the price it last moved on-chain (i.e. the last time it was transacted). This is in contrast to traditional market capitalization which values each unit of supply uniformly at the current market price. Realized cap therefore better accounts for units of supply that have not moved in a long time, and gives a more accurate view of market capitalization.

 

 

Bitcoin Halving Survey

The survey contains 12 questions and is running from 30/01/2020 to 06/02/2020. We have collected 9,567 responses and removed 35 responses with suspected data quality issues. The final sample size for the study is 9,532.

Quick Take Away:

  • 72% of respondents have heard of bitcoin halving

  • For those that have heard of halving, their estimates on the percentage of people (in crypto space) that have heard of halving is 56%. Compare with 72% from above, this indicates a difference between the reality vs perceived reality from our respondents

  • For those that have heard of halving, 75% believe that bitcoin’s price will go up due to halving

  • The average bitcoin price prediction by the end of 2020 from our respondents (after removing outliers) is USD $14,628

 

 

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