On Friday, in a blog post, Binance introduced BTCB, an encapsulated bitcoin asset designed to transfer liquidity from the world’s largest cryptocurrency, BTC, to the DeFi (decentralized economy) ecosystem from Binance’s Smart Chain.
However, fraudsters may be excited about renewed interest in the BTCB for another reason: Every bitcoin locked on the BSC could contribute to an impending BTC supply crisis.
First announced last year, Binance originally only encapsulated Bitcoin as a way for traders to gain access to assets along the entire chain without leaving BSC since then, but limited interest in Bitcoin has risen side by side due to the early maturity of the DeFi ecosystem . .
For example, WBTC – a bitcoin token encapsulated in Ethereum – has been a huge success since its launch in January 2019: it is currently ranked 14th among cryptocurrencies by market value and has found widespread use in protocols such as Aave and Uniswap. , whose contracts are among the top 10 owners of WBTC.
In a blog post, Binance suggested that similar accreditation may be possible for BTCB. Encapsulated Bitcoin can be used to mint stack coins using BSC’s own protocols such as QIAN and Venus; As a guarantee for credit protocols such as Careem; And in harvesting and liquidity recovery protocols like Beefy, Bakery and Pancake.
According to what Binance calls the Asset Confirmation site, there are currently over 9600 bitcoins on BSC, worth over $ 181 million. However, a blog post indicated that there are only 2,000 copies in circulation.
Other chains supported by smart contracts intend to exacerbate the growing scarcity. The Wormhole project, through the Solana chain, converts ERC-20 tokens to SPL tokens, including WBTC, and similarly uses Interlay Web3 Foundation support to create an insecure bridge that delivers encapsulated bitcoin to Polkadot. Interlay will start in early 2021.
Especially if the success of Bitcoin’s encapsulated and cross-linked assets continues to grow, organizations wishing to reduce the supply of BTC may face increasing scarcity.