Amidst the controversy and development of DeFi, a new trend enters the scene – tokenized Bitcoin.
Tokenized Bitcoin – what is it?
Tokenized Bitcoin is essentially the digital certificate of a stock of Bitcoin (BTC) and can be used to digitally represent Bitcoin held by an individual. This new asset can be used as collateral, traded and sold like other cryptocurrencies.
Bitcoin is already digital – why incorporate tokenized Bitcoin?
Many DeFi applications (dApps) have continued to build on ETH, and as a result, Bitcoin has been bypassed and left out of this ecosystem. To compensate for this, developers innovated ‘wrapped’ Bitcoin (wBTC) followed by renBTC, and finally landing upon tokenized Bitcoin (tBTC).
Developed by the Keep Network, tBTC allows investors to convert their BTC into this tokenized form to transition into the use of DeFi markets built upon Ethereum. As BTC contributes approximately 60% of all crypto market capitalization, this access to DeFi markets may provide just the growth it needs.
Matt Luongo, the tBTC.network lead has the support over 50 partners including Summa, Keep, DLT Capital, Paradigm, Cross-Chain Group, and Andreesen Horowitz. As a true believer in the DeFi ecosystem, Luongo champions the development of tBTC into DeFi markets with hope for a better future for everyone.
There is some speculation currently surrounding the DeFi market as prices plummet and tBTC enters the ecosystem. During this transition, tBTC has received criticism from Bitcoin maximalists, who consider the tokenized form of Bitcoin as not “real” Bitcoin.
Despite criticism, tBTC has been welcomed by many as it is considered to be completely audited, protected via Nexus Mutual and open source. This combination enables users to exchange their BTC for tBTC safely and at a ratio rate of 1:1.
In our current time of crisis and pandemic, where stability seems far out of reach, safety sells. Tokenized Bitcoin now numbers over 70,000 on the Ethereum blockchain which equates to about 2% of all Ethereum accounts.