New Bitcoin Token Overtakes WBTC on Avalanche – Crypto News – Crypto News
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New Bitcoin Token Overtakes WBTC on Avalanche New Bitcoin Token Overtakes WBTC on Avalanche

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New Bitcoin Token Overtakes WBTC on Avalanche – Crypto News

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2 years ago

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Signs are emerging that the biggest Bitcoin-like token could be unseated. BTC.b is outpacing the long-standing incumbent, Wrapped Bitcoin, on the Avalanche network.

On Sunday, Trader Joe’s, the top decentralized exchange on Avalanche, tweeted it had processed nearly $1B worth of BTC.b trades across its Avalanche, Arbitrum, and BNB deployments.

According to DexTools, BTC.b volume beat out WBTC on Avalanche by 12% over the past 24 hours.

Bitcoin holders who want to use their BTC on other blockchains, for example, to gain interest or use as loan collateral, can issue tokens that represent their BTC holdings on those chains. The largest of these BTC derivatives is WBTC, with a market capitalization of $4.4B. WBTC relies on centralized third parties to custody Bitcoin, and a limited set of institutions can issue the token to then sell to individuals.

BTC.b, the wrapped bitcoin upstart, could be issued by bridging Bitcoin to Avalanche using the Core extension, and bridged to other blockchains using LayerZero.

“For a long time, the primary way to use Bitcoin in DeFi was by relying on centralized bridges such as WBTC,” Trader Joe’s said,

The growing popularity of BTC.b highlights the appetite for decentralized and trustless alternatives to the centralized bridges that underpin much of cross-chain DeFi. Centralized bridges proved to offer enticing honey pots for hackers in recent years, accounting for $2B or two-thirds of the total losses to crypto exploits last year, according to Chainalysis.

fast rise

LayerZero quickly rose to prominence as a leading team working on cross-chain interoperability over the past year, having processed more than $6B worth of bridging transactions since launching in March 2022. However, two-thirds of its cumulative volume was processed during the six weeks following Aribtrum’s $1.7B air drop on March 23rd.

However, LayerZero’s purported trustlessness came under scrutiny in January, when a researcher Flagged that the protocol’s design could facilitate malicious collusion between the project’s Oracles and Relayers.

,[The paper’s authors] directly state that in order for their mechanics to work, it’s required that Oracle and Relayer are independent and do not collude,” Krzysztof Urbański of L2Beat, a crypto analytics website, told The Defiant. “But it’s up to app developers to choose who is serving as Oracle and Relayer, so they are free to set it up in a way that they are actually dependent and that they do collude.”

LayerZero responded that Urbański’s research rehashed information that was already in the public domain.

“You can build good and bad things on top of it, just like you can build good and bad things on the internet and blockchains.” Ryan Zarick, LayerZero Labs’ co-founder, said.

Trader Joe’s emphasized the composability of LayerZero’s Omnichain Fungible Tokens (OFT) standard, which underpins BTC.b.

“OFT means that users don’t have to worry about constant wrapping/unwrapping, and DeFi projects can easily integrate BTC.b into their applications,” it said.

More than 5,700 Bitcoin have been bridged onto Avalanche via BTC.b, equating to a $163.8M market cap, according to CoinGecko. Users have bridged more than 2,500 BTC.b via LayerZero, indicating the token enjoys significant adoption across multiple chains, including Arbitrum and BNB Chain.

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