Bitcoins Are Being Tokenized Faster Than They’re Mined as DeFi Craze Continues

The decentralized finance craze is causing demand for tokenized bitcoin to surge.

Aug 15, 2020 at 2:45 p.m. UTC
Updated Sep 14, 2021 at 9:44 a.m. UTC

Since Sunday, 1,043 more bitcoins were tokenized through wrapped bitcoin than were actually created by bitcoin miners as the Ethereum-based decentralized finance (DeFi) boom shows no signs of abating.

  • About 900 bitcoins are mined per day, given the current issuance rate of 6.25 bitcoins minted per block and the target 10-minute block time.
  • At last check, nearly 31,000 bitcoins have been tokenized on Ethereum, according to Dune Analytics, 75% of which were minted by wrapped bitcoin (WBTC).
  • Ethereum’s supply of tokenized bitcoins hovered below 3,000 until mid-May, when the rate of new tokens shot up.
  • The rate of bitcoin tokenization signals the surging demand to use bitcoin in the burgeoning network of Ethereum-based DeFi applications.
  • “WBTC continues to exhibit strong growth as demand for bitcoin in DeFi has exploded,” said Kyle Davies, co-founder of Three Arrows Capital, in a private message with CoinDesk. “I expect this trend to continue,” he added.
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WBTC and BTC issuance since August 9

  • In July, Three Arrows Capital minted its tokenized bitcoins through BitGo, the company that helped spearhead wrapped bitcoin in 2019.
  • Within a year, WBTC will be a “first class asset” in the decentralized finance ecosystem, predicted Three Arrows co-founder Su Zhu, “just as USDC and USDT are now.”
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