In the last few weeks, the decentralized financial ecosystem of Ethereum is about to explode. Due to a series of events DeFi has experienced a user increase, such as the search for yield, the introduction of Compounds COMP and other Trends.
Data suggest that some Bitcoin holders are willing to enter the DeFi-madness by you to provide your Coins with a Token to get a foot in a door. But this is a controversial Trend that is triggering a number of reactions within the crypto-community.
What is Bitcoin in Token?
Until recently, it was DeFi ETH – Zurich and only to ETH.
This is largely due to the fact of how Blockchains work: Since most of the DeFi-based applications on the Ethereum block Chain, users and developers can use only this network-based resources.
This has led to Bitcoin – widely regarded as a “Reserve Asset” of the crypto-currency market – most often not “part of the DeFi-equation”.
Therefore, developers have begun to create ways to use his BTCs “token”. This means that you can have a Token, the BTC is represented on Ethereum, or other Chains, so that Bitcoin can be integrated into the DeFi-equation.
There are projects such as Wrapped Bitcoin, tBTC, imBTC and others that do this.
Between the various symbolized BTC projects, there is now a crypto-currency to the value of $ 100 million, based on Ethereum. This corresponds to a hundred-fold growth in just over 18 months, a Bitcoin holder have been tempted to catalog your BTCs due to the income that you can achieve through participation in DeFi, in Tokens, crypto.
Data from Anthony Sassano
Ethereum advocates: This is bearish for BTC
Ethereum advocates say that this is a Trend for BTC, and the underlying network is bearish.
The co-founder of EthHub, Anthony Sassano, has published a four-part Thread in the speculation.
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He writes: Because you can participate, neither transaction fees nor WBTC/tokenized BTC, will be in comparison to ETH for a “second-class citizens”. In addition, the act of Tokenization of BTC the crypto currency make supposedly “just another Token/Asset in Ethereum”.
To the question of why this would be for Bitcoin as a network is bearish, writes Sassano, that Bitcoin “fees losing revenue/security”, if user start to buy in the Token is converted to BTC instead of the actual BTC.
Bitcoiners don’t think that is a good idea. The were quick to put the in the Thread above ideas, while many argue that pseudonymous BTCs are actually dangerous.
Phil Geiger of Unchained Capital, writes that there is exactly “0 BTC” on the “on quicksand-built” Ethereum:
“There are BTCs that have sent people to addresses, which are not under the control of someone else, in exchange for casino brands, except the casino is from Ikea-materials to be built on quicksand and is sinking.”
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The pseudonymous Bitcoin advocates “Grubles,” sees it differently, writing that it was “interesting to see that the ETH-Maxis to celebrate the BTC, which is held by a single Depositary.”
The two comments were related to the design of Wrapped Bitcoin the provides that someone who wants the WBTC deposited his Token in the case of BitGo, takes on KYC part, and then his Token receives.
There was a few months ago a Tweet from Bitcoin-whale “joe007”. On a Tweet by Eric Wall on WBTC the pseudonyms Trader replied, giving up the token of his BTCs on Ethereum authorize unfortunately the unmatched security of the Bitcoin Blockchain.