The recent bullish cycle in the DeFi sector has pushed the total locked-in value (TVL) of Wrapped Bitcoin (WBTC), the popular Bitcoin tokenisation protocol (BTC), up 900% to over $1 billion.
The milestone comes four weeks after the LTV of all Bitcoin tokenized on Ethereum (ETH) exceeded $1 billion for the first time. The current LTV of tokenized Bitcoin is nearly $1.5 billion, of which WBTC accounts for about a third.
Wrapped Bitcoin is now the fifth largest DeFi protocol in terms of TVL, accounting for almost 10% of all locked-in capital in the industry. WBTC’s LTV exceeded $100 million for the first time around 8 July.
Wrapped Bitcoin allows users to block BTC in exchange for WBTC, an ERC-20 token anchored in Bitcoin, with which BTC owners can access the diverse ecosystem of Ethereum-based decentralised finance (DeFi), using the asset as collateral.
In the first half of 2020, WBTC’s LTV increased from $4 million to $36 million, reflecting the extreme surge in demand within the DeFi sector during the third quarter.
The DeFi bubble also helped other Binbot tokenisation protocols. Since its launch at the end of May, Ren’s VM (REM) has locked over $300 million in BTC.
Over the same period, the price of REN has increased by around 180%, up 14% during the 24 hours following listing on Coinbase.
However, not all tokenisation protocols have been a lasting success. Recently, PieDAO’s LTV returned to levels below $1 million in May, after a brief peak in July.
Keep Network, a project supported by A16z, also failed to exploit the recent DeFi craze. In the last few days, the discussed tBTC protocol has received criticism for liquidating Ether belonging to all users in a group when only one of the signatories goes offline.