Interest in bridging Bitcoin (BTC) with the Avalanche Smart Contract Blockchain (BTC.b) continues to grow as supply of Wrapped Bitcoin (wBTC), the largest wrapped version of Bitcoin on Ethereum, dwindles.
On Thursday, over 2,000 BTC (44 million. That has lifted the total circulating supply of BTC.b to 8,572.
According to 0xAcid, half of the bitcoins minted on Thursday were moved to BENQI Finance. BENQI Finance is an avalanche-based decentralized finance protocol that allows users to lend, borrow and earn additional income from digital assets.
In June 2022, Avalanche added support for Bitcoin on its cross-chain bridge, allowing BTC holders to stake their coins in the Avalanche-based decentralized finance (DeFi) ecosystem to generate additional returns. BTC.b has since experienced impressive growth, surpassing the number of coins held on the Lightning Network.
A crypto bridge is a tool that facilitates interactions between the two economically and technologically separate blockchains. According to forensics firm Chainalysis, bridges have become the target of hackers in the past year, accounting for about 70% of all exploits in the crypto industry last year.
BTC.b Mint’s record comes as WBTC supply fell 15% to 153,164 in February, hitting its lowest level since March 2021, following a sharp drop in the token’s supply.
WBTC, issued by Bitgo, is an ERC-20 token based on the Ethereum network with its price pegged to 1: with Bitcoin. The token’s supply peaked at 285,000 in April last year and has steadily declined ever since.
The Avalanche community considers BTC.ba to be a better option than WBTC as Avalanche offers users the ability to mint and redeem BTC.b at any time with the bridge in a browser extension core without custody, eliminating the need for intermediaries. It offers users more control, unlike WBTC which relies on dealers to initiate the process of minting and firing.
According to Emperor Osmo, an anonymous author of Cosmos-based automated market maker Osmosis, investors in AVAX, Avalanche’s native token, have yet to take notice of the increasing use of BTC in DeFI, as evidenced by the rising supply of BTC.b.
“Over $200 million in BTC has been bridged to Avalanche [to date]. BTC DeFi narrative is definitely not priced in for AVAX,” Osmo tweeted early Friday.
At press time, AVAX was trading nearly 6% lower on the day, near $16, its lowest since Jan. 20. According to CoinDesk data, the cryptocurrency has seen its market value surge by 50% this year.
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