Ethereum blockchain now houses $700 million worth of synthetic Bitcoin

The Ethereum blockchain is now home to more than $700 million worth of synthetic bitcoin tokens, with Wrapped Bitcoin (WBTC) holding the lion share

Onchain data shows that there are roughly 69,836 synthetic bitcoin tokens, which are worth over $700 million circulating on the Ethereum network. The synthetic bitcoin (BTC) sector has grown massively in recent weeks, rising from 38,021 BTC to the current 70,000 BTC during that period. Amongst the six synthetic bitcoin token projects, wrapped bitcoin (WBTC) takes the lead as it currently accounts for over 63% of the market with 44,622 WBTC.

The rise in the number of synthetic bitcoins represents an 83% increase within a few weeks. According to Dune Analytics, there are seven synthetic BTC projects currently operational. However, TBTC (tBTC) has zero coins minted at the moment. Meanwhile, the other six synthetic bitcoin projects have between 45 BTC to over 40,000 BTC on the Ethereum blockchain.

WBTC leads the way

Wrapped Bitcoin (WBTC) protocol is the leading project minting synthetic bitcoin at the moment, commanding around 44,622 BTC or 63% of the total market. It is followed by Ren Protocol’s renBTC, which controls 23% of the market, with 16,268 renBTC currently in circulation. The other four projects are; hBTC with 4,180, sBTC with 2,918, imBTC with 1,173 and pBTC with only 45 at the time of publication.

Industry leader WBTC has gained a lot of traction in recent weeks, with reports on Friday revealing that Alameda Research acquired 70% of the total WBTC minted last month.

Most of the synthetic bitcoin is spread amongst the holders while the rest are used on cryptocurrency platforms like Uniswap, Balancer, Aave and Compound. A few centralised exchanges like FTX are supporting synthetic bitcoin trades on their platforms, with Binance revealing late last month that it is listing WBTC on its platform. However, most of the synthetic bitcoin trading volumes are found on decentralised exchanges (dex). Uniswap, Balance, Curve, Synthetix, Bancor and 0x are the decentralised exchanges with the highest synthetic bitcoin trading volume.

The synthetic bitcoin industry is growing in volume and popularity. However, it hasn’t won over some of the leading figures in the cryptocurrency industry. Ethereum co-founder Vitalik Buterin wrote on August 16 that he is worried about the synthetic bitcoin space. “I continue to be worried about the fact that these wrapped BTC bridges are trusted. I hope they can all *at least* move to a decently sized multi-sig,” the Ethereum developer added.

The tweet by Buterin sparked a debate within the cryptocurrency community, with members discussing a research paper published by the Wanchain project. The paper claims that the Ren Protocol store all their collateralised bitcoins in a single address. Despite the apparent trust issues, the Ethereum network continues to stand out as Bitcoin’s most dominant off-chain solution.

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