Cryptocurrency has paved its way back to popularity when the Decentralized Finance (DeFi) protocol BadgerDAO last week’s hack reached the media.
DeFi is seen as an alternative to high-yield by traders and investors. An ERC-20 token has doubled its supply, compared to last year’s record. This token is wrapped in bitcoin on the Ethereum blockchain that is being subsidized as 1-to-1 with bitcoin.
WBTC’s flexible and growing demand has been plummeting on its way to being less competitive. The demand turns out to be an income for bitcoin’s borrowing and lending market. In contrast to the DeFi lending market that has been going well, others saw BadgerDAO concentrating on high incomes on wrapped bitcoin as a threat to the security of moving bitcoin back to the Ethereum blockchain. The lost roughly $118 million, or 2,100 bitcoins because of this hack. They published this data analysis on December 2 and tweeted by China-based blockchain security and data analytics firm PeckShield.
According to @Messari_Jack compiled data on Dune Analytics, there is a total supply of WBTC of approximately 253,876. They recorded this on December 1. And, at the end of 2020, it rose to 112,948. Moreover, Alameda Research, CoinList, Grapefruit Trading, and Three Arrows Capital are the top WBTC merchants for minting. Alameda alone has a recorded minted of more than 9,6547.2 WBTC.
DeFi Llama stated that the total value of WBTC stops at around $12.53 billion. This means it is also the fifth-largest DeFi protocol by TVL. Investors define TVL as the value of all tokens locked into the smart contracts of a divided lending project.
One of the biggest WBTC merchants, Joe Keefer, a trader at Grapefruit Trading, stated on the CoinDesk Telegram that borrowing and lending with WBTC is currently easier. This is in comparison to BTC for the reason that users can interact with DeFi about its lending protocols in comparison to Compound, Aave, and Maker.
He also added that WBTC gives opportunities when it comes to direct yield farming.
BlockFi and Celsius
As of this writing, BlockFi and Celsius have an interest rate as high as 6.20% when it comes to bitcoin borrowing. Centralized lending platforms include BlockFi and Celsius. In contrast to Defi, people know them for using unique trading strategies. Defi has a lower rate of yield from farming. Users can use Maker’s own stablecoin as collateral on the MakerDao policy to mint Maker’s own stablecoin. This allows users to save time instead of going to a centralized lending program.
CoinDesk reported that WBTC-generated dai has a lot of potential. One of these includes lending dai for an income.
Dan Burke, managing director for institutional sales at crypto custody company BitGo, messaged CoinDesk directly. He stated that the profit that bitcoin is providing is very low. In comparison to WBTC, where you can keep it in any Ethereum-based DeFi pool or decentralized exchange (DEX),
The BadgerDao exploit showed that big rewards always come with riskier risks.
BadgerDAO’s official website published that its programs benefit its users. This is by offering automated strategies to mine bitcoin-pegged assets, including WBTC and ibBTC, or interest-bearing bitcoin.
On a YouTube livestream, Celsius CEO Alex Mashinsky talked about the missing funds that were lost. He stated that the forfeited funds belonged to the company and that the hacking that happened didn’t affect any of its users’ money.
Crypto lender Celsius Network firmly said that the money was lost through hacking. They didn’t disclose the exact value loss, but for some observers, after trailing the blockchain data, they came up with a value of roughly $51 million via WBTC.