Should You Put Your BITCOIN on ETHEREUM!? How? Why!?

Hey yo, what is going on, with the Chico Army
& any newbie aka a viewer of the tube. If you don’t know by now, my name is Tyler,
the host of the crypto channel, that knows tiktok, is for creeps & for China to invade
America, through our youth, and Vine was so much better per example, will Sasso…you
know how we lemonade. It’s time for Chico Crypto! So, I’m sure you could tell what this video
is about, something highly interesting that is going on the cryptocurrency space.

Ethereum, becoming the gravity well that will
suck bitcoin assets into it’s protocol. And the data is already there which proves
just this…wrapped bitcoin, since May has exploded from about 1k bitcoin in May, to
today over 6k. A 6x increase in just 2 months. That’s basically 60 million dollars, brought
over from Bitcoin, which is now on Ethereum. And the asset, wrapped bitcoin? It has been actually trading a bit higher
than BTC over the past 7 days, as there is money to be made, with interest, borrowing
and lending wBTC. Just look at the charts, and you layer over
wBTC, slightly higher almost everyday. But that is just one of the bitcoin on ethereum
assets. There are many protocols, pushing out their
own versions. renBTC, which since it’s recent launch just
keeps exploding. There is now over 7.4 million dollars, locked
in Bitcoin, which is nearly 800 BTC according to etherscan.

Then you have Tokenlon’s imBTC, which has
been out for a bit more time than REN, but not as explosive….from Etherescan, we can
see there are just over 560 imBTC…which means 560, bitcoin have been locked worth
over 5.2 million dollars. And finally, the slower growth of the collateralized
bitcoin on Ethereum protocols, pTokens pBTC, which has only managed to capture about 30
BTC, worth just over 230 thousand dollars. But if you added all of this up, that’s
over 7500 BTC, and combined it into 1 wallet, it would make it a top 250 BTC wallet already. Let’s just say, in another 6 months it doubles
to 15000 BTC, which in my opinion, is on the low end of the estimates…that would put
DeFi bitcoin, into the top 50 Bitcoin Wallets, which are mostly centralized exchanges up
in that range. Starting to shake yet?? Getting scurry Binance and the like? So, I’m sure some of you are like Tyler,
what is the best bitcoin on ethereum right now? Well, they all have their pro’s & cons,
& I’m going to try and bring out the best and worst in each of them right now.

So let’s begin, with the largest one, wBTC. Now, this is the centralized version of bitcoin
on ethereum. It can be considered a trusted version, where
you bitcoin leave your hands, and a custodian watches over them, while you use your wBTC. Which the proof of assets, are fully verifiable
on the wBTC website, for you to make sure the assets are there. Wonder why Bakkt, can’t do something like
this? Now, the custodian for wBTC is BitGo, one
of the leaders in the space for digital asset custody, and has regulations overlooked and
certified, by the SEC! But, the management of the wallet, and the
protocol is done through the wBTC DAO, which we can confirm by going to the Github for
it, which shows the multsig wallet, merchants in the system, and all DAO members.

So wBTC, if you want to Mint it, through one
of the Merchants…you have to do a KYC/AML process, so a lot of the diehard decentralize
heads did not like that feature. And a founding partner of wBTC, who created
RENBTC, put out something which makes getting wBTC so much easier. The wBTC Cafe, which connects directly to
a ledger or web wallet, and you do not have to go through KYC, to get wBTC…and this
is powered by of course REN but also curve finance.

2 solid DeFi lego pieces. So wBTC is the most liquid…pro. Custody by Bitgo-can be seen as a pro & a
con which we will get into with the other protocols.DAO for asset management-Pro. KYC…con, but solutions are being built. So, this wBTC, I would recommend it for someone
looking to put large amounts of Bitcoin on Ethereum, as it has the guarantee against
loss due to hacks, loss by employees, and more, but your moves are known due to KYC. Now, the next Bitcoin on Ethereum, comes from
REN again, but this time their version fully powered by the RENVM. We talked about it, RENBTC & The reason, I
like this version, is because of how collateralization works.

As we can see from the stats, we have over
7.5 million locked in the RENVM, which is mostly bitcoin, yet there is also something
called bonding, of which over 57 million REN are contained, worth over 9 million. So why is REN “bonded” and what is that? Well for Bitcoin to be created with the RENVM,
a user sends Bitcoin to a dedicated bitcoin address, verified by the VM. That BTC is then held in custody, through
a trustless manner, by the network of REN Darknodes. That RENBTC is then minted, and sent to the
USERs ethereum address to be used in DeFi. And here is where bonding comes in, with the
Darknodes. And from REN documentation, on the Darknodes…The
decentralized network of Darknodes is permissionless, but to prevent the forging of a large number
of identities a good behavior bond of 100,000 REN tokens is required in order to register
and run a Darknode. This prevents malicious adversaries from running
an unbounded number of Darknodes and overwhelming the network with misbehaving Darknodes. Yes, the Bond, is to prevent malicious activity
from their darknodes, like collusion to steal BITCOIN, or the other assets, you can mint
like ZCash, and bitcoin cash.

So, the value for REN token holders starts
to explode, the more RENBTC that is minted! And, with the tools REN is putting out, like
the wBTC cafe, that means wBTC use is going to be accelerated & that means more renBTC
will be minted. What? How? Remember I said, the wBTC cafe uses, the RENVM. #1 A user sends BTC to a Bitcoin address generated
on WBTC.Cafe. The RenVM then locks BTC on the Bitcoin network
and converts it to renBTC. #2 That renBTC is automatically received by
the curve finance liquidity pool where it’s automatically swapped for WBTC through the
protocol’s low-slippage pool and #3The user then receives the WBTC on Ethereum & are now
free to do as they choose with it. So, we have covered projects and btc’s on
ETH, I have talked about before, let’s dive into these other ones, which are more unknow.

Let’s begin with Tokenlon’s IMBTC, as
it has much more value locked up. And Tokenlon, is more like wBTC in that it
involves a trusted third party custodian, which is TokenLon themselves, I think, I couldn’t
find much on the custodian, which makes me weary. From a medium post on the topic “However,
we admit that the current imBTC is still not perfect, as is the case with most blockchain
financial products. Due to the limitations of blockchain technology,
it is impossible to achieve both the ideal decentralization and ease of use. Therefore, we choose to adhere to the principle
of security and transparency, and temporarily use centralized hosting to make imBTC easy
to use, so as to better popularize usage.

At the same time, Tokenlon is also planning
on how to transform centralized hosting into a DAO (decentralized autonomous organization)
hosting solution that remains decentralized, yet easy to use. So, custodianship, is scary, but the proof
of reserves are verifiable, if that really means anything. But looking at the custodian page, they have
something there, an APR…yes, for holding you earn interest, from the Tokenlon Dex platform…
they, distribute the transaction fee from purchasing imBTC on Tokenlon’s DEX to users
who hold imBTC…but then, you had this happen with imBTC..in April, several projects related
to imBTC, including one I covered pieDAO, were hacked and ya millions lost & what it
came down to? Was re-entrancy attacks, due to their erc
token design.

They chose erc777, instead of the tried and
true erc20, which allowed this attack to happen, to the dapps. RISKY! Now the final one, is PBTC, which only has
about 30 Bitcoin minted, worth around 270k but if we go to their website, the value is
over 320k, and as we can see from the graph, that is because they are minting on EOS too. Interesting, they have some cross chain stuff
going on…and they have a great infographic on their benefits over other, bitcoin assets,
and they explain they use a network of validator, secured by TEE to mint pBTC, noice I like
that… but there is a section on it’s market making and liquidity appeal, which they say
is high due to their peg in and peg out nature.

Well if we go to Coingecko, that isn’t there
for some reason, only just over 6k in volume, and the spread on it, is massive, pBTC is
worth over 10k, but you couldn’t get rid of a full one if you tried. So my friends, it’s the wild west of Bitcoin’s
on Ethereum, each version has it’s pros and cons. Custodian models, if they have a trusted entity,
might be safer for now, because of the vulnerabilities in smart contracts. But as, we saw with Tokenlon, they were centralized,
and their was a vulnerability found, not with them, but the dapps using their token standard. So as the decentralized protocols grow, get
tested, and the attack vectors closed, we will definitely see growth of RENBTC and possibly
pBTC.

So should you put your bitcoin on ethereum? I’m definitely thinking about putting 2. Make your own choice and do your own research. Cheers I’ll see you next time!.

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