How BTC Holders Can Access DeFi Opportunities on Ethereum With pTokens

pNetwork Team
Nov 3 · 4 min read
How BTC Holders Can Access DeFi Opportunities on Ethereum With pTokens

According to DeFiprime, 220 of 242 DeFi projects are developed on the Ethereum blockchain to execute trading, payments, lending, and borrowing, among others. That translates into 92% of DeFi projects being built on Ethereum. Nevertheless, the current DeFi market cap is still too small compared to that of the Bitcoin blockchain of $1 trillion.

With pNetwork connecting blockchains like Bitcoin and Ethereum, BTC holders can enter the DeFi market without being forced to swap their digital assets and change their portfolios in the process.

Why Ethereum Is the King of DeFi?

There are three reasons why the Ethereum blockchain is selected to build the majority of crypto projects.

  1. The Ethereum Network has a development interface that decreases programming time and allows projects to be launched quickly.
  2. Ethereum has the most extensive library of open-source resources.
  3. As the value of ETH is increasing, the speed to monetize dApps is unmatched. This makes it possible to sell assets such as NFTs at very high prices, attracting many new people to the system.

Bitcoin Is the Best Ally to DeFi

The current bitcoin market cap statistic is $1 trillion, which means it’s the most important cryptocurrency in the world right now, where 10% of bitcoin addresses have more than $1 worth of bitcoin; in other words, 1.3% of the global population owns bitcoin.

Any cryptocurrency’s value comes from what people use it for and the blockchain technology it has incorporated. Bitcoin is used for trading, payments, making transactions, lending, and borrowing.

Impact of Bitcoin Entering the DeFi Market

Despite the drawbacks of existing decentralized financial tools in their current state, the DeFi space is quickly increasing.

What if, in a cautious scenario, only 5% of bitcoin’s current market cap stepped into the DeFi market tomorrow? DeFi’s market cap would increase by 36%. Do you realize how big of an influence bitcoin may have on the DeFi ecosystem right now?

If we continue with the example given above, this $50 billion (5% of current BTC market cap) will be added to ETHs liquidity pools (LP) via pNetwork’s technology which will positively impact:

  1. : Ethereum’s fees could potentially stabilize because there are more blockchains where you can mint pTokens, causing ether to be used less.
  2. : Bitcoin can attract more liquidity and qualified users with a variety of new DeFi products.

But how can bitcoin holders directly participate in the DeFi ecosystem using pTokens?

How to Make Bitcoin Enter the DeFi Market With pTokens

The pNetwork technology integrates a token from one blockchain into another, transforming the token into a completely compatible version type and increasing the interconnectivity in decentralized finance (DeFi).

Technically speaking, pNetwork has developed a pTokens dApp where in seconds, you can swap cryptocurrencies like BTC, LTC, among others, and convert them into pTokens (pBTC, pLTC, etc.).

pNetwork pTokens dApp Bitcoin on Ethereum bridge
pNetwork pTokens dApp Bitcoin on Ethereum bridge

This progressively decentralized process makes assets compatible with DeFi platforms while maintaining a 1:1 peg with the underlying cryptocurrency.

Which DeFi ETH Platforms Support pBTC?

Here are some of the DeFi platforms where you can use pBTC:

  1. Uniswap: On Uniswap like any Ethereum DeFi dApp, you can stake your pTokens into the pBTC-ETH liquidity pool and get rewarded with Uniswap’s trading fees or trade pBTC for other tokens.
  2. Curve: On this platform, you can provide pBTC liquidity into the stable-BTC liquidity pool and get rewarded with Curve’s trading fees or swap pBTC for WBTC.
  3. Bitfinex: On Bitfinex, pBTC is leveraged underneath to enable direct deposits and withdrawals of BTC from/to host blockchains such as Ethereum and EOS.

Two Benefits of Bitcoin Entering the DeFi Market

There are two clear benefits that decentralized finance platforms will have from enabling bitcoin to be involved through pNetwork.

Bigger User Database

The total DeFi user database has grown exponentially, just like this chart shows where you can see that there are more than 2.3 million users in the DeFi ecosystem right now.

Number of total DeFi users over time
Number of total DeFi users over time
Source: Dune Analytics

Considering the 2.3 million DeFi users and 20+ million active bitcoin addresses right now, it’s clear that there is plenty of space for pBTC to grow to make it add more liquidity in DeFi pools as anything has done before.

Growth of DeFi Products

With the introduction of cryptocurrencies like bitcoin, whose infrastructure is not natively congruent with DeFi, but could bring a far larger amount of users and liquidity, decentralized finance platforms can expand their market share and benefit from additional liquidity, as well as their related reward rates.

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