After the global financial crisis of 2007-08, many innovations in the financial services industry have taken place. However, none can complete the recent DeFi boom. Wrapped Bitcoin (WBTC) is one such example of an innovative DeFi platform. Wrapped Bitcoin (WBTC) is a novel way of bringing in bringing liquidity to DeFi. Furthermore, Wrapped Bitcoin (WBTC) is gaining popularity as genuine Bitcoin recovers from its recent crypto crash. WBTC platform essentially converts BTC to Ethereum. Decentralized finance is one of the most common applications for WBTC. WBTC is a Cryptocurrency that allows Bitcoin investors to participate in the Ethereum Blockchain system. Most DeFi apps are hosted on the Ethereum Blockchain, which provides a wide range of investment opportunities not available on Bitcoin’s native platform. People can earn from Bitcoin lending, borrowing, and staking through DeFi apps on Ethereum. Wrapped Bitcoin has a market cap of $7,184,319,982.89 and is currently selling at roughly $35,840.00 as of June 2021. Sounds Interesting, yet confusing? Right? Let’s explore the dynamics of WBTC and Wrapped Bitcoin (WBTC) price prediction 2021 and beyond in this article. What Is Wrapped Bitcoin (WBTC)? Wrapped Bitcoin (WBTC) is an Ethereum-based ERC-20 currency, which was launched in 2019. It symbolizes Bitcoin (BTC) and WBTC’s connectivity with Ethereum wallets, dApps, and smart contracts is a significant benefit. 1 Bitcoin can be changed to 1 Wrapped Bitcoin through a WBTC partner, and vice versa. WBTC was intended to allow Bitcoin users to engage in Ethereum-based decentralized finance (DeFi) apps. WBTC’s BTC is openly verifiable due to a “proof of reserve” scheme that validates the 1:1 produced WBTC tokens that are backed by Bitcoin and held by custodians. The WBTC DAO, which now has over 30 members, is responsible for the upkeep of WBTC. Ren, Kyber, and BitGo were the original founders. On-chain and through the Coinbase platform, Coinbase has put in place measures to maintain a healthy and efficient network. Minimum and maximum quantities for each coin we enable consumers to send through the Blockchain are included in these safeguards. When sending money from Coinbase to an external address, the maximum amount is 62.5 WBTC, and the minimum withdrawal amount is 0.00054 WBTC. How WBTC Works? I assume that you’re already familiar with Bitcoin and are eager to get started with DeFi apps. But there’s a snag! Between Bitcoin and Ethereum, there is a lack of a cryptocurrency bridge that holds you back. Wrapped BTC contributes to the solution of this problem by providing much-needed liquidity to DeFi protocols. It allows users to compare BTC and ETH to stablecoins, despite the fact that Bitcoin isn’t always stable. Yeah, volatility cannot restrict liquidity anymore! When Bitcoin is wrapped, the BitGo Trust stores the cryptocurrency in reserve. The amount of WBTC in circulation is then made public and verification that the underlying asset called Bitcoin is being securely held in custody to act transparently (something that other stablecoins cannot assure at the moment). WBTC can be stored (and unloaded) in wallets like those offered by CoinList. I know you are wondering, Why aren’t we able to simply use Ethereum? Keep reading to find out! Why Can’t We Simply Use Ethereum? Nothing prevents you from utilizing ETH as a form of collateral on DeFi platforms. However, as evaluated in US dollars, Bitcoin’s market capitalization is far higher, making it critical to expanding the sorts of collateral that DeFi apps can accept, especially if the overall value locked in these protocols approaches new highs. With rising trade volumes, it’s more important than ever to ensure that transactions can be completed quickly and without substantial price variations. The amount of BTC turned into wrapped tokens is also increasing. The total value locked in WBTC increased by 943 percent from mid-May to mid-August 2020, according to DeFi Pulse. How Wrapped Bitcoin (WBTC) Is Beneficial for the DeFi Space? WBTC allows digital asset owners to experiment with several Blockchains. The Ethereum network, rather than the Bitcoin Blockchain, underpin a substantial portion of the DeFi ecosystem (including DApps). This can be incredibly aggravating for BTC owners, as it means that they will be unable to participate unless they sell their crypto assets or purchase others. Many DeFi protocols, including Compound, MakerDAO, the Kyber Network, and Dharma, have begun to allow borrowers to utilize WBTC as collateral since the WBTC network began in January 2019. Crypto loans are typically paid out using the DAI stablecoin on the Ethereum environment, which can then be locked up in a smart contract. The WBTC DAO is in charge of the Wrapped Bitcoin project. DAO stands for Decentralized Autonomous Organization, just to refresh your memory. Price Analysis of the WBTC Flashback: Historical Price Analysis of WBTC On July 27, 2020, WBTC reached $11,134.15 from $9,328.15 on June 19, 2020. The coin has shown bullish intentions since … Continued
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