The decentralized financing applications (challenge) on the Ethereum chain have experienced rapid growth in the past two years. Now, a number of synthetic versions of bitcoin , which exploit the Ethereum chain , have overtaken off-chain solutions like Blockstream's Liquid and Lightning Network.
Most recently, the Synthetix platform has revealed a partnership with Bitgo and the Ren project in order to create bitcoin- induced liquidity . Now, with a massive yielding agricultural pool, tokens like sBTC, renBTC and WBTC could easily trump off-chain alternative competitors.
Despite a number of debates about the “trust model” on Twitter, Ethereum is the largest side chain of the Bitcoin network ( BTC ) in locked total value (TVL) by far. Statistics from the Lightning Network (LN) show that the LN TVL as of June 26, 2020 is $ 8.9 million. Liquid.net data indicates that there are 2,160 BTCs or $ 19.7 million for Blockstream's liquid TVL.
Now the statistics of the Ethereum chain explode these two statistics, because there are more than 28,000 BTC locked in the Synthetix . A total of $ 263 million TVL is frozen in Synthetix at the time of publication. In addition, data from Curve.fi shows that renBTC has recorded a significant volume of transactions since its creation.
The WBTC project, backed by Bitgo, has a huge TVL of $ 66.9 million, with 7,600 BTC blocked in the challenge project contract. SBTC market statistics also show exponential growth over time. Then, on June 18, 2020, Taiyang Zhang of Project Ren announced the partnership of the yield farming pool.
“This pool consists of three BTC ERC20 variants ; renBTC, WBTC, sBTC. Our goal is to create the most liquid Ethereum- based BTC pool available to provide traders with the lowest sliding access for transactions between sBTC, renBTC and WBTC, "wrote Zhang. The Ren project representative also said:
In addition to the normal yield generated by the trading fees of Curve Pool, this pool includes an attractive basket of tokens for liquidity providers: SNX , REN, CRV and BAL. To seize all available incentives, liquidity providers will have to contribute sBTC, renBTC and / or WBTC to the BTC Curve liquidity pool .
Zhang also said that behind the scenes, “ Synthetix and Ren have created a balancing pool for SNX and REN where the LP rewards are distributed in the form of BPT (wrapped SNX and REN).” Project representative Ren said the team was "thrilled" with the latest partnership and "looking forward to participating in the early stages of challenge farming with Curve and Synthetix ".
Despite the massive switch to the Ethereum chain with three very popular synthetic BTC tokens , both networks suffer from higher network costs. Not only are challenge projects that offer synthetic BTC tokens used much more often, but stable coins on Ethereum also get a large share of usage.
PassionCrypto has just reported that Ehereum fees have exceeded BTC fees for a short time and with the recent combined use of challenge and stablecoin tokens, ETH fees have peaked at two years. According to Billfodl fee statistics, the "fee for your transaction to be mined on the next block (10 minutes)" is $ 0.78 at press time. Data from Bitinfocharts.com indicates that the ETH fees as of June 25, 2020 were $ 0.66 per transaction.
If Synthetix , Bitgo and Ren Project's yield farming pool offer becomes popular, this will affect network costs in the future. But also pose a threat to competitors of the BTC offline chain .
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