The use of Bitcoin in Ethereum network is rising fast. As DeFi experiences explosive growth, there are ramifications for the whole crypto sector. Decentralized Finance has witnessed tremendous growth in the past few months as hundreds of investors flocked to take part in the burgeoning DeFi projects. There’s massive growth potential in the DeFi sector right now.
However, there’s one issue that startles many – Ethereum is at the centre of all this growth. The dominance of Ethereum means that the king of cryptocurrencies, Bitcoin, is nowhere to be seen in the DeFi sector. However, this phenomenon is changing rapidly as BTC is entering DeFi in more ways than one.
Use of Bitcoin in Ethereum rising at a rapid rate
Approximately, 0.2 percent of the total BTC supply now rests in Ethereum-based decentralized applications. There are no direct BTC transactions on Ethereum wallets though. But developers have built contracts that allow users to deposit BTC and generate an equivalent Ethereum-friendly token representing the value of BTC deposited earlier.
Projects that allow transactions of Bitcoin on Ethereum network include Ren, Wrapped Bitcoin, and tBTC. Some crypto enthusiasts doubt the efficacy of these projects in terms of security, but there are thousands who willingly use these projects to use Bitcoin on Ethereum blockchain.
Combination of Bitcoin and Etehreum to power DeFi growth
As per Ethereum Foundation’s Justin Drake, approximately 0.2 percent of total Bitcoin supply has now entered Ethereum in the form of Wrapped or Ren tokens. A notable addition of the Curve protocol’s native governance token called CRV. Curve is a stablecoin-focused decentralized exchange, and it has garnered a huge influx of capital due to rising interest.
CRV incentives are also further promoting the influx of BTC into the DeFi projects. As per LoanScan, WBTC or renBTC deposits in Curve can earn up to 7.22 percent return annually.
The rise of Bitcoin in Ethereum represents uniform growth in terms of opportunities in the DeFi sector. MakerDAO president Steven Becker that the introduction of Bitcoin in Ethereum will benefit the overall crypto sector and help the decentralized economy swell.