Bitcoin Bridged to Avalanche Reaches Record Daily Coinage of Over 2K BTC
Interest in bridging bitcoin (BTC) to the Avalanche smart contract blockchain (BTC.b) continues to increase as supply of wrapped bitcoin (wBTC), the largest wrapped version of bitcoin on Ethereum, dwindles.
On Thursday, over 2,000 BTC ($44 million) was ported to Avalanche, the largest single-day BTC.b coin on record, according to data obtained from pseudonymous analyst 0xAcidits dashboard on Dune Analytics. That has lifted the total circulating supply of BTC.b to 8,572.
According to 0xAcid, half of the bitcoin minted on Thursday has been moved to BENQI Finance. BENQI Finance is an Avalanche-based decentralized finance protocol, which allows users to lend, borrow and earn additional returns from digital assets.
In June 2022, Avalanche added support for bitcoin on its cross-chain bridge, allowing BTC holders to distribute their coins in the Avalanche-based decentralized finance (DeFi) ecosystem to generate additional returns. BTC.b has seen impressive growth since then, surpassing the number of coins in the Lightning Network.
A crypto bridge is a tool that facilitates interactions between the two economically and technologically separate blockchains. Bridges became a target for hackers last year, accounting for about 70% of the total exploits in the crypto industry last year, according to forensics firm Chainalysis.
The record BTC.b coin comes as WBTC supply fell 15% to 153,164 in February, hitting the lowest since March 2021. Apparently bankrupt crypto-lender Celsius, a well-known WBTC holder, cashed in a large amount of WBTC, leading to a sharp drop in the token’s supply.
WBTC, issued by Bitgo, is an ERC-20 token based on the Ethereum network with the price fixed 1: with bitcoin. The token’s supply peaked at 285,000 last April and has been falling ever since.
The Avalanche community considers BTC.ba a better alternative than WBTC, considering that Avalanche offers users the ability to create and redeem BTC.b at any time with the bridge in a non-custodial browser extension Core, eliminating the need for intermediaries. It gives more control to users, unlike WBTC, which relies on sellers to start the process of embossing and burning.
According to Emperor Osmo, an anonymous writer for Cosmos-based automated market maker Osmosis, investors in AVAX, the original token of Avalanche, have yet to notice BTC’s growing use in DeFI, as evidenced by BTC.b’s increasing supply.
“Over $200 million worth of BTC has been linked to Avalanche [to date]. The 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. The cryptocurrency has seen a 50% gain in market value this year, per CoinDesk data.
