Bitcoin is the leading cryptocurrency, and will remain so for quite some time to come. However, there are numerous versions of BTC on the market, with a significant increase in tokenized Bitcoin offerings. Below are just a few examples of how tokenized versions of BTC can be used across different blockchains.
Wrapped Bitcoin (WBTC)
A lot has been said about Wrapped Bitcoin, especially in recent months. This tokenized version of the world’s leading cryptocurrency has existed on the Ethereum blockchain since early 2019. This token is a 1:1 value representation of a real BTC, but it provides access to services and products running on the Ethereum blockchain.
When DeFi was still a much smaller industry ,ost of the liquidity was provided in the form of WBTC. That goes to show that Bitcoin will provide liquidity to any blockchain, assuming there is some form of interoperability to take advantage of. Today, WBTC still represents nearly $156 million in value in the DeFi space, which is pretty significant.
Bitcoin BEP2 (BTCB)
Most people may have forgotten about BTCB by now. The tokenized version of Bitcoin on the Binance blockchain, Similar to WBTC, every BCB is backed at a 1:1 ratio with the real Bitcoin. When using BTCB, Binance is the custodian of the balances, although everything can be audited by the public if they desire to explore this option.
The main reason for using this asset is to trade on Binance’s DEX against other assets. So far, it is safe to say that this asset has not been overly successful in terms of trading volume, as there is really no reason to use it outside of Binance’s DEX. As such, one has to wonder how much longer this project will be maintained.
Liquid BTC (LBTC)
Tokenized Bitcoin on the Bitcoin blockchain itself may sound like a silly concept at first. According to the Liquid team, this tokenized asset can be used as part of its sidechain. What makes the sidechain so interesting is how it doesn’t rely on Proof-of-Work. Blocks are generated on the network every two minutes, allowing for much faster transactions, confidential transfers, and so forth.
LBTC is a very viable tool for settling funds between different exchanges and trading platforms. Especially traders who want to explore arbitrage opportunities may want to take note of what LBTC can bring to the table. Having quick and convenient access to BTC liquidity creates a competitive edge. LBTC is integrated into numerous exchanges, including Bitfinex, Coinut, ZB.com, MXC, and so forth.