Bitcoin Investors Swap for Ethereum Wrapped BTC to Yield Farm and Chill

Bitcoin Investors Swap for Ethereum Wrapped BTC to Yield Farm and Chill

It is estimated that $274 million or 23,100 wrapped bitcoin is in circulation in the market recently. Wrapped Bitcoin or WBTC has seen very high growth from last few weeks. According to a registered digital-asset data provider, almost half of the wrapped bitcoin was mounted a few weeks in the past itself which resulted in the growth of the decentralized finance sector.

Wrapped bitcoin allows the users to seamlessly bitcoin to the ethereum network which helps to interact with smart networks. WBTC is actually a token that stabilizes the price of bitcoin which was launched in 2019. The growth in decentralized finance is basically pointing at the fact that people are always searching for high yield options to hold bitcoin. The growth in WBTC has also been inflated by the yield farming phenomena because above the half of the WBTC is kicked in the Defi landing protocol compound.

High Privacy Values of yield farmers

The most valued and popular ethereum for bitcoins in recent times is the WBTC. As it is one of the easiest, although it comes with a very vulnerable policy that includes “know your customer” procedure and a third party custodian service. This raises concerns among many users about privacy and censorship. As the interest in Defi is growing around varied institutions by central banks, many individuals are preferring to stay anonymous when using wrapped bitcoin.

19% of the new addresses brought using the WBTC on August are through renBTC. So, what is renBTC? It is something similar to WBTC but it actually features trustless storage for bitcoin. This is because renBTC allows all users to stay anonymous while they can own their assets, completely. The percentage points out that privacy is a genuine drive factor in the growth of the Defi sector.

Will ethereum be able to support the growth? Although Defi looks promising

Many of the Defi protocols have already been subjected to the issues of security and malfunction. The yield farming might have different consequences with the tokens involved in each platform. Let us explain it with an example, 50% or more of the DAI is already locked in the compound which might end up disrupting the peg with the dollar. The compound of WBTC is also locked in the compound as well. This will eventually bring liquidity issues in the market for tokens in hand. One of the disturbing facts is that the ethereum network is bogged down due to tremendous network congestion and high fees surrounding it. The future is bright for DeFi, but the question is, will ethereum be able to face the coming challenges?

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