Which of the four generations of Bitcoin-anchored coins is more powerful to carve up the trillion-dollar market?

Bitcoin is opposed by veteran investors such as Buffett because it cannot generate positive cash flow. For bitcoin holders, if they only hold native bitcoins, they cannot use various DeFi protocols and cannot enjoy the benefits of liquidity mining. As the cryptocurrency with the largest market value and the best liquidity, if the market value of Bitcoin assets cannot be converted into the bottom layer of various financial applications, this also limits the development of DeFi. BTC anchor currency (cross-chain assets) can solve these problems, introduce the value of Bitcoin into other public chains, reduce the user's psychological migration cost, allow users to participate in DeFi applications and obtain benefits, and allow Bitcoin to pass through Cross-chain becomes a veritable "interest-bearing asset". The anchor currency on the Bitcoin side chain will eventually become an early part of history, and people are thinking about how to introduce Bitcoin into the side chain to meet the needs of fast transfers. SmartBTC (SBTC) and LBTC are two representative solutions. They are built on the Bitcoin sidechain Rootstock (RSK) and Liquid Network respectively, and are bidirectionally anchored to the Bitcoin blockchain. Locking BTC in the main chain can anchor the corresponding BTC on the side chain. These two types have also become the first generation of Bitcoin anchor coins. However, with the development of DeFi on Ethereum, the development of Bitcoin side chains is no longer competitive enough. Ethereum introduces smart contracts into the blockchain, and wants to become a general-purpose computer, attracting more and more developers and communities, and becoming a gathering place for innovation on the chain. Now, the ecology of the Ethereum network is relatively complete, and people think more about how to introduce BTC into Ethereum. In the past year, the circulation of BTC-anchored coins on Ethereum has increased from 2,477 to 211,714, an increase of 85 times. The development of BTC-anchored coins has been quite rapid, but the current application in the Ethereum network is still just 1% of the total BTC. Hunan Big Data Exchange's Cultural Big Data Trading Center is online: Jinse Finance reported that on September 7, the Hunan Big Data Exchange's "Cultural Big Data Trading Center" was officially launched. The trading center is a full-link institution for the circulation of cultural data assets under the Hunan Big Data Exchange. The center is positioned to guide the orderly flow of cultural data elements and promote the development of the cultural big data industry by providing a compliant digital service platform for the cultural industry. It is reported that the blockchain technology platform used by the exchange is "Wenwu Chain", which is an independent and controllable national secret chain developed by the "Xiangjiang Laboratory" team led by Academician Chen Xiaohong. It can also realize the open cooperation of digital assets in the world. [2022/9/9 13:18:21] The centralized issuance method relies on custodian institutions, and there is a single point of failure. After the 3.12 plunge last year, MakerDAO added WBTC as a collateral option in order to enrich the types of DAI collateral. Since then, various mainstream DeFi applications have integrated WBTC. It can also be seen from the above figure that the most widely used BTC-anchored coins are still centrally issued WBTC and HBTC, which are also representatives of the second-generation Bitcoin-anchored coins. There are many institutions participating in WBTC, including blockchain projects such as BitGo, Kyber Network, and Ren, as well as the joint efforts of custodians, merchants, exchanges, and DAO members. Although the official claims that this is a community-led project with an open and transparent hosting address, because its reserves are completely hosted by BitGo, it cannot change the nature of centralization. After clarifying the issuance and destruction process of WBTC, PANews found that custodians and merchants are at the core of WBTC exchange. First of all, the merchant needs to initiate the minting of some WBTC to ensure that a part of the WBTC is used as liquidity when the user exchanges with themselves. The process of minting WBTC by the merchant is as follows: the merchant initiates a minting request to the contract; transfers BTC to the custodian account; the custodian initiates a request to mint WBTC to the contract; the WRAPPED TOKEN contract sends WBTC to the merchant. Web3 game platform ITSBLOC completes $7.5 million in financing, Nexus one and others participated in the investment: September 8 news, Polygon blockchain-based Web3 game platform ITSBLOC announced the completion of $7.5 million in financing, Vista Labs, Nexus one, Edimus Capital, Atlas Capital , Bull&Bear and other 8 institutions participated in the investment. (benzinga) [2022/9/8 13:16:24] Ordinary users can exchange WBTC directly from merchants. Merchants provide users with exchange services and charge a certain fee. The role of merchants in this process is equivalent to traditional financial transactions. intermediaries in. When users exchange, they first submit an exchange request to the merchant, execute KYC/AML procedures and verify their identity, transfer BTC to the merchant, and the merchant then transfers WBTC to the user. If users want to exchange WBTC for BTC, they must either sell it in the secondary market or redeem it from the merchant. Similarly, only merchants can burn WBTC to redeem BTC from the contract. The custodian transfers the BTC to the merchant, and at the same time the BTC in the merchant's address is destroyed on the chain. It can be seen that the above process relies heavily on the custodian, which is BitGo. Although BitGo has long been one of the safest cryptocurrency custodians, people tend to have too much trust in reputable centralized solutions, but any single point of failure is extremely scary. In the early years, BitGo was involved in a security incident. In August 2016, Bitfinex used software provided by BitGo to establish a multi-signature system to authorize transactions. Probably because the system on the Bitfinex server was improperly installed, 120,000 BTC was stolen by hackers. HBTC and imBTC are also more centralized BTC-anchored coins. HBTC is launched by Huobi Exchange, which is the most convenient BTC-anchored currency. BTC assets are mortgaged on the chain, which is open and transparent. Users only need to recharge BTC to the Huobi Exchange, and select the ERC20 version of the token when withdrawing coins to generate HBTC. Similarly, BTC can also be exchanged directly through the exchange when redeeming. But this has a high risk of centralization and needs to rely on Huobi Exchange. Beijing Winter Olympics Figure Skating "Daughter" Anna Shcherbakova's World Premiere Digital Collection: Jinse Finance reported that according to the World Wide Web, the Beijing Winter Olympics champion and figure skating "Daughter" Anna Shcherbakova will be held on 6 The world's first digital collection will be released on September 20th. The first series of collections select important life nodes in the "Daughter" figure skating career for creation. It gathers many unique design elements and is extremely valuable for collection, including the exclusive signature designed by "Daughter". The warm blessings from others, the sharing of the daughter's journey, and the special shooting of the championship moment are all released publicly for the first time. [2022/6/18 4:36:41] imBTC is issued and regulated by Tokenlon, and is a token anchored 1:1 with BTC. When a user purchases imBTC on Tokenlon DEX, the smart contract will deduct a 0.3% transaction fee, which will be distributed to imBTC holders. But last year, due to re-entry attacks, the Uniswap ETH-imBTC liquidity pool was exhausted and Lendf.Me assets were stolen. It can be seen that there are still many problems in the centralized BTC anchor currency. Not only does it require a high degree of trust in the corresponding custody institution, but also needs to pay attention to technical issues. Decentralized BTC anchor currency road, perfect solution to be solved Since Ren Protocol released renBTC last year, it has locked BTC in a decentralized way and issued BTC anchor currency on Ethereum. So far, the Bitcoin anchor currency has evolved to the third generation. Users deposit native BTC into the RenBridge gateway, and Ren's virtual machine RenVM issues renBTC on Ethereum through smart contracts. In addition to the original BTC mortgaged by minting users 1:1, the issuance of renBTC also requires nodes to pledge. The nodes in the Ren Protocol are called dark nodes (Darknode), each node needs to mortgage 100,000 REN tokens, and the REN collectively mortgaged by nodes on each shard is not less than three times the value of BTC. At present, the circulating market value of REN is only 837 million US dollars. Based on the current BTC price, even if all REN is pledged, only 5211 renBTC can be generated. Even so, because the price of REN fluctuates greatly, a three-fold overcollateralization does not ensure the security of the network. On April 18, 2021, the price of REN on Binance dropped from $1.1 to $0.015 in a short period of time, a drop of more than 98%. At this time, the collateral value of the node is close to zero relative to the issued renBTC. Synthetic asset platform Public Mint has reached a partnership with encrypted lending platform Celsius: On February 7, synthetic asset platform Public Mint has reached a partnership with encrypted lending platform Celsius. Its EARN product will use Celsius, allowing users to borrow from Benefit from cryptocurrency-based returns. (Global Fintech Series) [2022/2/7 9:35:25] In tBTC, ETH holders can pledge ETH to become tBTC validators, providing decentralized services for cross-chain assets. The validator is a key role in tBTC. Three validators are randomly selected for each coin minting, and the validators must pledge 1.5 times the value of minted tBTC in ETH. At the beginning of tBTC's launch, there was a loophole that made deposits unable to be redeemed. At present, tBTC v2 is about to go online, introducing at least 100 signer sets to replace 3-of-3 signer sets; changing the validator’s collateral from ETH to NU or KEEP; and reducing the user’s minting cost by integrating the L2 protocol. In the current issuance of renBTC and tBTC, users need to pledge native BTC 1:1, and nodes or verifiers also need to over-collateralize to ensure the security of the network. Nodes can obtain a small amount of service fees from users as income, but the income may be much less than the deposit interest in ETH 2.0 pledge and mainstream decentralized lending agreements. According to the earnings announced by tBTC, the yield of nodes is only 1.25%. Another method of issuing BTC-anchored coins without a centralized institution is the synthetic asset sBTC in Synthetix. At present, a total of 1,512 sBTCs have been issued, ranking fifth in the circulation of BTC-anchored coins. In Synthetix, assets are less utilized. The user first needs to over-mortgage SNX and mint the synthetic asset sUSD. The value of the mortgaged SNX is at least 5 times that of the minted sUSD. After that, convert sUSD to sBTC in synthetix.exchange. All debts in Synthetix will enter the debt pool and be shared by all mortgage users according to the proportion of debts. The Swiss National Post Office officially released Polygon-based "encrypted stamps" today: On November 25, the Swiss National Post Office officially released "Encrypted Stamps" today. The collection consists of physical parts and digital parts NFT. There are 13 types of corresponding NFTs. , which can be used for collection and trading. It is reported that the series of collections will be graded according to different rarity levels. The most common type will be issued in 65,000 copies, and the rarest will only be issued in 50 copies. Earlier news, on September 20, the Swiss National Post Office announced that it will launch an "encrypted stamp" based on the Polygon chain. [2021/11/25 7:10:41] With the stacking of DeFi Lego, Curve uses Synthetix's synthetic assets as a bridge to realize the exchange between different types of assets. Taking the process of converting DAI to wBTC as an example, firstly, DAI will be converted to sUSD in Curve; then sUSD will be traded into sBTC in Synthetix; finally, sBTC will be converted into WBTC in Curve. Because of the low slippage of similar asset transactions in Curve, and synthetix.exchange has unlimited liquidity, this function is very suitable for large-scale exchange of cross-assets. But it is worth thinking about where the liquidity of converting stablecoins into BTC assets in transactions comes from. For example, the liquidity of ETH-DAI is provided on Uniswap. When the price of ETH rises, as investors buy, ETH will be gradually replaced by DAI, which has impermanent losses compared to the state of holding currency. And in this example, it is synthetix.exchange that provides cross-asset liquidity. After the conversion is completed, the sBTC debt in the debt pool increases. If BTC rises, all users who mint sUSD will suffer additional losses, and the uncertainty will increase. DeCus, a cross-chain custody system with a high capital utilization rate, needs to fully trust the centralized organization to issue BTC-anchor coins in a centralized manner. According to the open spirit of the blockchain, the decentralized BTC-anchor coin issuance method (no KYC required) ) is the future trend. However, limited by existing technologies, there is no perfect solution at present. In the decentralized BTC-anchored currency, minting users basically only need to pledge native BTC at 1:1. The biggest problem is that nodes or verifiers need to over-collateralize, and the volatility of mortgage assets relative to BTC is greater, so The security of the system is also a test. Based on an SCI paper written by Conflux Research Director Dr. Yang Guang, DeCus has formed an efficient hosting model and established a self-regulating hosting network. Keeper is the core of the network, responsible for hosting the original BTC pledged by users, providing collateral to ensure system security, and running nodes. The smart contract deployed on the blockchain is responsible for minting the corresponding BTC anchor coin (eBTC). Users who want to mint eBTC first submit a request to the smart contract on the Ethereum network, and then obtain the specified Keeper multi-signature BTC address. After depositing the original BTC 1:1 into the multi-signature address and submitting the deposit certificate, the corresponding amount of eBTC will be sent to the user's ETH address. With the improvement of mortgage rate and interoperability, eBTC brings the Bitcoin anchor currency into the fourth generation. According to the overlapping group proposed by DeCus, under the same conditions, the security of the network is better than that of the non-overlapping group. To give an example, when there are 6 Keepers in the network, suppose two Keepers A and C are doing evil.

Tags：

Bitcoin