BitGo’s WBTC Maintains Over 65% Market Dominance Despite Custody Model Criticism: Report

Wrapped Bitcoin (WBTC), a wrapped version of Bitcoin developed by BitGo, Kyber Network and Ren, continues to dominate the tokenized BTC market despite criticism surrounding the project, according to Binance Research’s latest monthly report.

The wrapped token represents Bitcoin 1:1 on other blockchains like Ethereum and Solana. This allows users to access BTC in the decentralized financial landscape.

WBTC has more than 65% market share

The Binance Research log showed that weekly WBTC transactions have reached an all-time high of 123,200. For several consecutive weeks, it also saw more than 100,000 weekly transactions for the first time. WBTC supply has also increased by more than 152,400, representing more than 65% of the market share.

WBTC’s current metric is commendable due to several factors. One is its creator’s decision in August to partner with BitGlobal and Tron founder Justin Sun to expand the asset’s operations to other jurisdictions such as Hong Kong and Singapore. The partnership also aimed to redesign WBTC’s custody structure.

However, several members of the crypto community criticized Sun’s participation in the joint force. BitGo CEO Mike Belshe tried to calm things down by assuring users that Tron’s founder cannot move the funds on his own. After community backlash, crypto projects like Sky (formerly MakerDAO) proposed removing WBTC from their escrow.

Weeks after criticism from community members, other companies emerged with their Bitcoin tokens under wraps. A popular one is Coinbase’s cbBTC, a wrapped Bitcoin launched on Ethereum and Base. Shortly after its debut, cbBTC became the third largest Bitcoin exchange.

Ethereum turns inflationary

Another problem with the market report is that Ethereum is currently leaning towards inflation. Last month, its inflation reached a level not seen in two years.

Ethereum claims to adopt an ultrasound money system, which makes ETH resistant to inflation while strengthening purchasing power. However, the Binance Research report shows that the second largest cryptocurrency is moving out of the deflationary zone.

After Dencun’s upgrade, the network saw a decrease in transaction fees, resulting in fewer ETH coins being burned. With the issuance rate of ETH reaching approximately 0.74% in 30 days, market watchers believe that the coin is entering the inflationary zone.

Binance Research stated that it would regain its deflationary status if there was a significant increase in network activity on the mainnet.

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