As the #DeFi craze continues, a new trend has emerged – tokenized Bitcoin. Think if this new asset as a digital representation of the Bitcoin you hold, such as a digital certificate to a stock of gold, that you can now trade, sell and use as collateral.
LONDON, ENGLAND – AUGUST 15: In this photo illustration a visual representation of the digital … [+] currency Bitcoin sinks into water on August 15, 2018 in London, England. Most digital currencies including Bitcoin, (BTC) Ethereum, (ETH) Ripple (XRP) and Stella (XLM) have seen a dramatic fall in their prices throughout 2018 amid a ‘mass sell-off’. In December 2017 the price of BTC hit $20,000 USD but has since fallen to around $6000 USD. (Photo Illustration by Dan Kitwood/Getty Images)
But isn’t Bitcoin already digital, you ask? Yes, but apparently not in the ‘correct way’. As most of decentralized finance applications continue to be build on Ethereum, Bitcoin just doesn’t quite fit into this ecosystem. And so, developers stepped up to the task to create a ‘wrapped’ version of Bitcoin, starting with wBTC, renBTC, and the newly re-launched tBTC, by the Keep Network.
Investors can now convert BTC into tBTC, and use this new token to access the DeFi markets on Ethereum. With roughly 60% of crypto market cap in BTC, Bitcoin tokenization is a potential catalyst for further growth in DeFi markets.
tbtc.network is led by Matt Luongo, with the support of more than 50 partners, Keep, Summa, Cross-Chain Group, DLT Capital, Paradigm and Andreesen Horowitz.
tBTC claims to be fully audited, open-source, and with protection through Nexus Mutual, allowing people to safely exchange at a rate of 1:1 their BTC for tBTC, an ERC-20 token. Compound and Uniswap are among the decentralized platforms that have been integrating tBTC.
Scalar Capital Managing Director Linda Xie, says:
“A decentralized version of tokenized bitcoin is key to catalyzing the next stage of growth in DeFi. I’m confident that tBTC offers the best solution with the team’s commitment to security, transparency, and decentralization as well as the strong community that has grown around the project.”
tBTC runs on the Keep network, powered by KEEP tokens. Keep is a portfolio company of venture studio Thesis.
Tokenization of Bitcoin has been received with harsh criticism from Bitcoin maximalists, who argue that any representation of Bitcoin is not “real” Bitcoin, but rather an ‘IOU’ and removes the key benefits of holding a sovereign asset.
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