Author: crv.mktcap.eth

Compiled by Alex Liu, Foresight News

Will the bad news for WBTC be good news for tBTC?

Thought you could touch the grass safely on the weekend? Unfortunately, new FUD has emerged!

Last week, BitGo announced that it would hand over control of WBTC, sparking concerns over the health of the WBTC project over the weekend. (In the announcement, BitGo said the move was a strategic collaboration with Justin Sun and the Tron ecosystem.)

Bitgo Announcement

Why would anyone be concerned about Justin Sun having more strategic power over WBTC?

First-generation DeFi players may remember Sun Yuchen’s previous launch of Bitcoin wrapped token HBTC, which later had poor results - the current trading price is closer to USDT than BTC.

HBTC price on CoinMarketCap

Will things be different this time?

Justin Sun was quick to clarify his exact role in the ecosystem:

Justin Sun’s statement

Nonetheless, DeFi users have initiated serious discussions about WBTC’s role in the ecosystem.

WBTC has been criticized for its relative centralization, and their attempt to justify their credibility is that "BitGo's balance sheet is strong, and if this is indeed an issue, we are happy to demonstrate this to appropriate counsel." Compared to rhetoric, tBTC has on-chain proof of reserves.

WBTC remains the largest BTC wrapped token, surpassing all its competitors. In the last cycle, other BTC wrapped tokens that had dual-currency trading pairs with WBTC on Curve Finance were: Ren Protocol’s renBTC and Synthetix’s sBTC, but both no longer exist.

What are some other alternatives to WBTC? It’s hard to say there is a perfect solution at this point.

An attractive option is frxBTC, which is rumored to be launched “soon.” But Degens want “now” not “soon.”

Frax founder says "frxBTC will be available soon"

In fact, the most viable alternative to WBTC is tBTC from TheTNetwork (Threshold Network). In addition to being more decentralized, tBTC also demonstrates long-term, large-scale, reliable operations:

  • v1: 4 years

  • v2: 1.5 years

After BitGo announced its latest decision, Maker DAO was arguing fiercely about closing all WBTC debt, which constitutes about 10% of DAI’s collateral. A strong alternative is needed to abandon WBTC. Not surprisingly, tBTC entered the discussion:

tBTC has good DeFi adoption. It has a lot of use cases in Curve Finance. In addition to being actively traded in major stable and volatility pools, tBTC can also mint crvUSD stablecoins.

Some traders have already started the switch, crvUSD whales are participating in the WBTC / tBTC debate?

Whale users use tBTC to participate in DeFi

Could this storm cause a $tBTC/$WBTC price flip?

The hourly chart shows some price movement after the Bitgo news spread.

But we don’t expect this shift to actually happen any time soon.

The market caps of both BTC wrapped tokens have remained fairly stable over the past week. Even amid the controversy, neither token has seen significant inflows or outflows.

The market value of the two is very different:

  • WBTC ：155000 BTC

  • tBTC ：3000 BTC

WBTC does have a “crazy moat!” and its profit margins are very low. $9 billion worth of BTC only earned $12 million in fees. Therefore, WBTC is unlikely to disappear anytime soon.

The liquidity and integrations that a wrapped token has accumulated over so many cycles will not be replaced any time soon, especially if the token functions properly and remains PEG.

Nonetheless, if you want to promote a more decentralized future, you can consider minting $tBTC when you want to transition from BTC to ETH. You can convert from wBTC to tBTC and convert it back to native BTC for safekeeping (or continue to use tBTC as DeFi collateral).

tBTC has good liquidity on the chain