HomeCryptoBitcoinDeFi: more bitcoin on Ethereum than on Lightning network

DeFi: more bitcoin on Ethereum than on Lightning network

After a few weeks of proximity, the overtaking has happened, the bitcoin locked on Ethereum thanks to DeFi projects have outnumbered those locked on Lightning Network.  

A particular arrangement of data that, to some, will undoubtedly make their noses twitch. 

An indicator that could lead people to think and draw attention to developments in the DeFi sector.

defi bitcoin

We are witnessing the creation of innovative technologies capable of producing financial instruments derived from the main cryptocurrencies.

With the creation of the DAI Stablecoin by MakeDAO on Ethereum, DeFi has now become famous.

We must not forget that the decentralized finance category includes all the instruments that have a role in producing services that can be attributed to the concept of traditional finance, but with a decentralized model.

Lightning Network is one of them. 

Making it as simple as possible, the Lightning Network allows instant payments and micropayments through smart contracts that connect Bitcoin’s blockchain to the network of participants.

Ethereum is capable of doing the same, through special smart contracts it has been possible to bring in its network a digital representation of bitcoin (BTC) in order to exploit its liquidity and position it within the vast ecosystem based on ETH.

WBTC is an ERC20 token that represents bitcoin on the Ethereum network, it is backed 1:1 by real bitcoin deposits.

A technological partnership between well known actors such as BitGO, Kyber, Ren and many others has allowed the birth of a DAO able to manage what is defined as wrapping: BTC deposit and creation of a representative token able to be freely exchanged and used in the Ethereum ecosystem.

WBTCs can be “wrapped” by the user or freely purchased on the market knowing that for each of them a BTC has been locked on the BTC blockchain.

pTokens: the crosschain tokens

pBTC is a new model of ERC20 token that has the same objectives as WBTC but with different and innovative technological assumptions. It is a crosschain system that brings different assets such as BTC, EOS, LTC on the Ethereum blockchain.

The pTokens have just been created and they seem destined to grow.

pBTC is already present on Kyber Network and other platforms.

Defi bitcoin

Decentralization in comparison and adoption

The purists of decentralization and the ideologues of the blockchain and DeFi world, have raised criticisms both regarding the Lightning Network model and the Ethereum wrapped coin model.

Security, decentralization, model of incentives, there are many points on which the debate is focused and this is not the article that deals with them.

For the moment Lightning, despite being longer available to users, is losing momentum while the Ethereum ecosystem is attracting more liquidity becoming to all intents and purposes the layer 2 of Bitcoin.


Lorenzo Dalvit
Lorenzo Dalvit
Blockchain enthusiast tutor, expert in sales and marketing, social community manager, artistic director, musician, lover of disruptive paradigms and life. All my skill are about human interaction and connection