The amount of Bitcoin circulating on the Ethereum network via the Wrapped Bitcoin (wBTC) tokens has nearly surpassed the amount of Bitcoin circulating via its layer-two scaling solution, the Lightning Network.
Data from Bitcoin Visuals shows that on the Lightning Network there are about 883.4 BTC circulating on the flagship cryptocurrency’s layer-two scaling solution, as the amount of locked cryptocurrency in it has been dropping from its all-time high of 953 BTC seen in June 2017. Data from DeFi Pulse, on the other hand, shows 989 BTC locked in the network.
Source: Bitcoin Visuals
The data shows that the Lightning Network’s capacity started growing in ealru 2018 and surged near the end of that year, to then hit its all-time high in 2019. Since then, however, it has been declining, partly because a BTC whale that initially created a large amount of nodes with large capacities has started withdrawing some funds after making $20 a month in commissions, after spending an estimated $1,000 in transaction fees to set up the nodes.
On the other hand DefiPulse data shows that the amount of BTC on the Ethereum network via the wBTC ERA-20 tokens is now of 888 BTC, a figure that is confirmed by the official webpage of the token, showing that in custody there are an additional 0.5 BTC.
The Wrapped Bitcoin token was launched back in February 2019 and is essentially an ERC-20 token backed 1:1 by the flagship cryptocurrency. The project was launched by BitGo, in collaboration with the Kyber Network and Republic Protocol. Its use in the decentralized finance space has been growing thanks to the infrastructure providers offering it support.
In July 2019, open-source lending platform Compound added support for wBTC, allowing users to earn interest on their BTC holdings via the wrapped token on the Ethereum blockchain. NEO-based cross-chain atomic swap exchange Switcheo has also added support for wBTC, making it tradeable on a decentralized exchange that allows users to trade across various blockchains.
The token also likely benefited from the growth in the decentralized finance space, which surpassed $1 billion in total value locked last month tanks to growing cryptocurrency prices. After a project on the space was exploited, however, investors withdrew 200,00 ETH from it. The DeFi space has since been recovering.
Featured image via Pixabay.
