Let’s take a look at how the DeFi market moved in the past seven days, how it relates to the behavior of the overall cryptocurrency market and recent news:
With the big drop of last week being linked to the liquidation of large amounts of BTC derivatives contracts, it was only logical that we saw a drop just as steep in the DeFi market. However, as the overall market dropped nearly $20 billion and has barely recovered half of it, DeFi is already higher than it was before the fall and the total TVL of the market is moving around the $1 billion mark.
For today’s quick review, we take a look at Wrapped Bitcoin (WBTC), an asset-oriented DeFi project that aims to continually raise the liquidity of the Ethereum network by bringing in the liquidity of Bitcoin. They do it by backing the value of their token to the price of Bitcoin in a 1:1 manner.
By allowing for the creation of smart contracts with this token, which is directly backed by Bitcoin, they bring the liquidity built by a history of transactions across multiple exchanges into the ERC20 format, essentially bringing together the best of the two largest names in the cryptocurrency landscape.