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As Bitcoin continues to maintain its position as the most valuable and liquid cryptocurrency, the demand for integrating its utility into other blockchain ecosystems has grown. One such integration is BTCB, a tokenized version of Bitcoin on the BNB Chain. BTCB allows Bitcoin holders to access the rich BNB Chain ecosystem without needing to sell their BTC.
What is BTCB?
BTCB is a tokenized version of Bitcoin that exists on the BNB Chain. It is created through a process called “wrapping,” where Bitcoin is deposited into a smart contract, and an equivalent amount of BTCB is minted on the BNB Chain. This 1:1 pegging mechanism ensures that BTCB mirrors the value of Bitcoin, allowing users to hold BTCB while still being able to redeem it for actual Bitcoin whenever they choose.
BTCFi and BTCB
BTCFi, or Bitcoin DeFi, is crucial in extending Bitcoin’s utility beyond a store-of-value. It allows Bitcoin to participate in the broader DeFi ecosystem, enabling users to leverage their Bitcoin holdings for activities such as lending, borrowing, and trading in other platforms.
BTCB bridges the gap between Bitcoin and the BNB Chain DeFi ecosystem. By using BTCB, Bitcoin holders can access a wide range of DeFi services on the BNB Chain, enhancing the liquidity and utility of their BTC. Using BTCB also allows users to experience fast transactions and low gas fees, which are limitations on Bitcoin’s native blockchain.
Why You Can Trust BTCB’s Security
One of the primary concerns with tokenized assets is their security and trustworthiness. BTCB addresses these concerns through several mechanisms:
- Custodial Approach: BTCB is issued using a custodial approach, where Binance.com, a trusted and well-established cryptocurrency exchange, manages the minting and burning of BTCB. Binance holds the equivalent amount of Bitcoin in a multi-signature cold storage wallet, ensuring that the reserves are secure and not easily accessible.
- Proof of Reserves: Transparency is a critical component of BTCB’s trustworthiness. Binance’s Proof of Collateral can be checked any time. Users can verify the amount of Bitcoin held in reserve against the amount of BTCB in circulation. This public record ensures that BTCB is fully backed by actual Bitcoin, instilling confidence in its value and security.
- Reputation and Track Record: Binance’s reputation as one of the largest and most trusted cryptocurrency exchanges further reinforces the security of BTCB. The exchange has a proven track record of handling billions of dollars in assets.
How BTCB Can Be Used on BNB Chain
BTCB is already supported by a wide variety of DeFi protocols in the BNB ecosystem such as Venus, Radiant, Kinza, Solv, Karak, pStake, Avalon, pumpBTC, and BitU.
Here is an overview of BTCB’s liquidity in various protocols and corresponding APY (where applicable).
| Protocol Name | TVL Locked (# of BTC and its values in $) | APY |
| AAVE | Supply: 539($31M) Borrow: 12($709K) | <0.01% |
| Venus | Supply: 10.4K($608M) Borrow: 630($36M) | 0.02% |
| Kinza Finance | Supply: 445($26M) Borrow: 38($2.2M) | 4.56% |
| Radiant | Supply: 403($23.6M) Borrow: 145($8.4M) | 1.9% |
| Solv | 10,506($617M) | |
| Pancake | 273($16M) | Up to 1% |
| PumpBTC | 60($3.5M) | |
| BitU | ~290 ($17M) | ～7.2% |
| Avalon | 87($5.1M) | 0.29% |
| Total | ～22K (~$1.32B) |
Here are some things that you can do:
Lending and Borrowing
BTCB can be used as collateral to obtain loans on lending platforms like Venus and Radiant. Users can access additional funds without selling their Bitcoin.
Yield Farming
Platforms like Kinza, and Solv offer yield farming opportunities where users can stake their BTCB and earn rewards in the form of additional tokens.
Minting Stablecoins
BTCB can be used as collateral to Mint stablecoins on platforms like BitU. The stablecoins can then be used for trading, earning yield, or as a hedge against market volatility.
Trading and Liquidity Pools
BTCB can be added to liquidity pools on various protocols. By providing liquidity, users earn fees generated from trades within the pool. This allows Bitcoin holders to earn passive income on their BTCB while still retaining exposure to Bitcoin’s price movements.
Of course, BTCB can be traded on DEXs like PancakeSwap for other assets. Users can benefit from arbitrage opportunities and access a wide range of trading pairs.
Looking Ahead
BNB Chain is dedicated to enhancing its BTCFi ecosystem, and BTCB already plays a significant role in this mission. While BTCB is already widely integrated and highly functional, the BNB Chain team is actively working to expand its utility even further across a broader range of protocols. For example, Lorenzo Protocol’s upcoming BTCB staking on Babylon can be a potential gamechanger bringing in tremendous amount of value and utility to BTCFi on BNB Chain.
Stay tuned for upcoming integrations and updates as we continue to strengthen BTCB’s presence and capabilities.
