Nexo

Start Earning Up to 16% Interest Automatically

Learn More
Home » Analysis » $165 Million Bitcoin Moved to Ethereum after Uniswap’s UNI Token Launch

$165 Million Bitcoin Moved to Ethereum after Uniswap’s UNI Token Launch

by

The supply of tokenized Bitcoin (WBTC) on Ethereum is booming after the introduction of UNI token yield farming incentives for WBTC pool. 

$165 Million Bitcoin Moved to Ethereum after Uniswap’s UNI Token Launch

Key Takeaways

  • Over 15,000 WBTC was minted since Sept. 17 prompted by UNI token yield farming incentives on Uniswap. 
  • The comparative returns for Bitcoin-based pools are higher than Ethereum and Chainlink on DeFi platforms like yEarn Finance. 
  • Curve added a new HBTC pool alongside the existing BTC-based pool backed by RenBTC, wBTC and sBTC. 

Share this article

WBTC (Wrapped Bitcoin) added 15,000 tokens 24 hours after UNI token launch, taking the amount Bitcoin locked in DeFi to $1.2 billion. High returns on Bitcoin-specific pools is another impetus for the mass move.

The Uniswap Effect 

Wrapped Bitcoin is tokenized BTC issued on Ethereum. Launched in January 2019, WBTC had a relatively slow growth until the explosion of DeFi’s yield farming. WBTC has surpassed $800 million in locked value, adding Bitcoins worth $500 million since August. 

TVL of Wrapped Bitcoin
Total Value Locked in WBTC Source: DefiPulse

Uniswap is the leading decentralized exchange (DEX), which is leaving centralized exchanges like Coinbase behind.

The WBTC-ETH pool on Uniswap has become a significant source of attraction as it is one of four pools on Uniswap with added UNI token incentives.

Currently, the WBTC-ETH pool is the largest pool on Uniswap in total liquidity at $391 million. This amounts to a staggering 900% increase since Sept. 17. The relative volume of other WBTC pools on Uniswap paints a clear picture of the source of the demand. 

While the WBTC-ETH pool 24-hour volume is close to $40 million, it is zero for the other WBTC pools. 

Wrapped Bitcoin on Uniswap
WBTC Liquidity on Uniswap Source: Uniswap Info

New UNI-incentivized pools will not be added for the next 30 days within the governance grace period. This indicates that the expansion of the pool is likely to continue. 

The other pools which qualified for yield farming UNI include DAI-ETH, USDT-ETH, USDC-ETH. These pools expanded by 880%, 136%, and 142%, respectively, since the announcement. 

Bitcoin on Ethereum 

The total value of BTC locked in smart contracts is $1.25 billion, at the time of writing. 

Bitcoin pools and vaults are gaining more traction due to their high returns, causing an increase in the amount of minted WBTC, renBTC, and sBTC on Ethereum. 

Tokenized Bitcoin is an ERC-20 token whose value is backed by actual BTC locked in the specific smart contracts. Tokenized BTC is compatible with DeFi platforms built on Ethereum.

RenBTC on Curve accounts for 18% of the total deposited value, just short of $1 billion. The yEarn Finance vaults’ annual returns for Curves’ sBTC LP comprising RenBTC, WBTC, and sBTC is around 30%. Whereas, the other two cryptocurrency-based vaults on Ether and Link project a yearly growth of 1.73% and 2.24% only. 

Recently, Curve also added a new HBTC pool to its decentralized exchange platform. But the pool has only added $1,300 worth of HBTC in the one week of launch. 

The liquidity mining returns on DeFi platforms increases the incentives for holding Bitcoin. However, these carry additional smart contract risks that come with the potential loss of actual Bitcoins backing the token. 

Forced liquidation, loss of tokens, technical glitches, and theft are some of the few risks that come with Bitcoin minted on Ethereum. 

Share this article

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

Crypto Briefing may augment articles with AI-generated content created by Crypto Briefing’s own proprietary AI platform. We use AI as a tool to deliver fast, valuable and actionable information without losing the insight - and oversight - of experienced crypto natives. All AI augmented content is carefully reviewed, including for factural accuracy, by our editors and writers, and always draws from multiple primary and secondary sources when available to create our stories and articles.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.