Demand for Wrapped Bitcoin is increasing along with the DeFi rally.
Binance, the world’s largest cryptocurrency exchange in terms of market capitalization, is listing another token to support the growth of decentralized finance, or DeFi.
As officially announced, Binance users can now start deposit WBTC as well as trade the token against Bitcoin and Ether (ETH).
Introduced in 2019, Wrapped Bitcoin is an Ethereum-based token that represents Bitcoin, with one WBTC being equal to one BTC. WBTC is a joint initiative by major DeFi players like BitGo, Ren, Dharma, Kyber Network, Compound, MakerDAO and the Set Protocol. The token is designed to bring more liquidity into the Ethereum network with Bitcoin as well as implement it in the DeFi industry.
As part of WBTC’s functionality in DeFi, the token allows Bitcoin holders to keep holding BTC while also using DeFi apps like Compound to borrow or lend money.
Opposed to traditional finance, decentralized finance, or DeFi, envisions a brand-new monetary system built on top public blockchains. As DeFi platforms connect borrowers and lenders directly eliminating credit checks, and enable digital assets to be collateralized, DeFi provides decentralized lending as its key benefit.
The DeFi industry has been growing exponentially in 2020, with the total value locked in the market hitting $9 billion on Aug. 30. Uniswap, the most widely-used decentralized exchange on Ethereum, surpassed major crypto exchange Coinbase in daily volume on Aug. 30, as Cointelegraph reported earlier today.
As DeFi continues to see meteoric rise, the demand for WBTC is also up, hitting $274 million in circulation by mid-August.
Binance has been actively embracing the DeFi market this year. In August 2020, Binance launched DeFi staking in partnership with major industry players like Compound Finance and Kava Labs. In April, Binance issued a new DeFi token backed by the crypto asset, Ontology (ONT).