Ethereum’s decentralized financial ecosystem has exploded in recent weeks. Due to a number of events, DeFi has seen an increase in users, such as the search for yield, the introduction of COMP compounds and other trends. According to data, even some Bitcoin holders want to get into DeFi madness by tokenizing their coins to get a foot in a door. But this is a controversial trend that is triggering numerous reactions within the crypto community.
What is bitcoin in tokens?
Until recently, DeFi was about ETH – and only about ETH.This is largely due to how blockchains work: Since most DeFi applications are based on the Ethereum blockchain, users and developers can only use resources based on this network.As a result, Bitcoin – largely seen as a “reserve asset” of the cryptocurrency market – was mostly not “part of the DeFi equation”.Therefore, developers have started to create ways to “tokenize” their BTCs. That means you can have a token that represents BTC on Ethereum or other chains, so Bitcoin can be integrated into the DeFi equation.
There are projects like Wrapped Bitcoin, tBTC, imBTC and others that do this. Between the various symbolized BTC projects, there is now a $ 100 million cryptocurrency based on Ethereum. This is a hundredfold growth in just over 18 months, with bitcoin holders being tempted to crypto their BTCs into tokens based on the returns they can get from participating in DeFi.