With Ren Protocol going live in recent weeks, we’ll begin to see more and more product releases leveraging the protocol’s interoperable, trustless custodian – the RenVM.
This was first marked last week with Curve Finance, the stablecoin-focused AMM, integrating the RenVM to provide DeFi users with seamless cross-chain swaps from native BTC to WBTC. This release still continues today with the launch of WBTC.Cafe on mainnet.
— Ren (@renprotocol) June 15, 2020
WBTC.Cafe offers DeFi users an easy way to acquire WBTC with native BTC. The release emphasizes the potential for cross-chain DeFi composability as the RenVM acts as permissionless money lego for DeFi applications to bring over non-native assets to Ethereum. In short, WBTC has been a collaboration between three major DeFi projects including Ren Protocol (the RenVM), Curve Finance, and WBTC.
These projects have worked together to build a major key for bringing the highest valued crypto asset by market cap over to Ethereum. Prior to this launch, porting over Bitcoin to Ethereum via WBTC largely required a third party custodian like BitGo or CoinList, which is largely restricted to institutional/accredited investors. As such, WBTC has been limited in its ability to expand. However, we’ve seen the Ethereum-based Bitcoin spike in popularity in recent weeks as nearly 3,000 WBTC (~$28M as of writing) has been minted since the beginning of May.
Now with the permissionless-nature of the RenVM and WBTC.Cafe, the custodial-reliant version of Bitcoin is now available for anyone to mint at their own will.
WBTC.Cafe achieves this technological feat through 3 simple steps:
- RenVM: A user sends BTC to a Bitcoin address generated on WBTC.Cafe. The RenVM then locks BTC on the Bitcoin network and converts it to renBTC.
- Curve Liquidity Pool: Receives renBTC where it’s automatically swapped for WBTC through the protocol’s low-slippage liquidity pool
- WBTC: The user then receives WBTC on Ethereum. They’re now free to do as they choose with their newly minted Ethereum-based Bitcoin.
With Maker, Compound, Aave, and most protocols supporting WBTC in some capacity, there’s no shortage of things to do in the DeFi ecosystem with your otherwise-idle BTC. Equally as important, Keep Network’s tBTC has been struggling to go live on Ethereum mainnet. The protocol is taking a more ambitious approach than its centralized counterpart (WBTC) so it should come as little surprise. But still a bit disheartning. Only time will tell with this, but it’s important to recognize the value of a completely decentralized, trustless version of Bitcoin on Ethereum given DeFi’s broader vision of trust-minimized finance.
Now with a seamless mechanism for anyone to lock up their native BTC and port it over to Ethereum, we should see the trend of Bitcoin on Ethereum and DeFi continue to take hold.
WBTC currently has just less than 4,000 BTC in circulation valued at $38M as of writing while it’s newly found trustless custodian, the RenVM, has processed nearly $2M in cumulative volume while holding $1.1M in locked value.
We’ll continue to keep an eye on how this develops in the future.
Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.