Will the bad news for WBTC be good news for tBTC?

Original author: crv.mktcap.eth

Original translation: Alex Liu, Foresight News

Will WBTC's negative impact be a positive for tBTC?

Thought I could touch the grass safely over the weekend? Unfortunately, there is new FUD!

Last week, BitGo announced that it would hand over control of WBTC, raising concerns about the health of the WBTC project over the weekend. (In the announcement, Bitgo stated that the move was a strategic collaboration with Justin Sun and the TRON ecosystem.)

Bitgo Announcement

Why would anyone be concerned about Justin Sun having more strategic power over WBTC?

DeFi first-timers may remember Justin Sun’s previous Bitcoin wrapped token HBTC, which subsequently underperformed — currently trading closer to USDT than BTC.

HBTC price on CoinMarketCap

Will things be different this time?

Justin Sun was quick to clarify his exact role in the ecosystem:

Justin Sun’s statement

Nevertheless, DeFi users have initiated a serious discussion about WBTC’s role in the ecosystem.

WBTC has been criticized for its relative centralization, and their attempt to prove their credibility is that "BitGo's balance sheet is strong, and if this is indeed an issue, we are happy to prove this to the appropriate lawyers." Compared to rhetoric, tBTC has on-chain proof of reserves.

WBTC remains the largest BTC wrapped token, surpassing all its competitors. Other BTC wrapped tokens that had dual-currency trading pairs with WBTC on Curve Finance in the last cycle were: Ren Protocol's renBTC and Synthetix's sBTC, but both no longer exist.

What other alternatives are there to WBTC? It's hard to say there is a perfect solution at the moment.

An attractive option is frxBTC, which is rumored to be launched "soon". But Degens want "now" rather than "soon".

Frax founder said "frxBTC will be available soon"

In fact, the most viable alternative to WBTC is tBTC from TheTNetwork (Threshold Network). In addition to being more decentralized, tBTC also demonstrates long-term, large-scale, reliable operations:

· v1: 4 years

· v2: 1.5 years

After BitGo announced its latest decision, Maker DAO fiercely debated closing all WBTC debts, which constitute about 10% of DAI collateral, and abandoning WBTC requires a strong alternative. Not surprisingly, tBTC entered the discussion:

tBTC has a good DeFi adoption rate. It has found a lot of use cases in Curve Finance. In addition to being actively traded in major stable and volatility pools, tBTC can also mint crvUSD stablecoins.

Some traders have already started the switch, crvUSD whales are participating in this WBTC / tBTC debate?

Giant whales use tBTC to participate in DeFi

Could this storm cause a tBTC / WBTC price flip?

After the news of Bitgo spread, the hourly chart shows some price movement.

But we don’t expect this shift to actually happen anytime soon.

Both BTC wrapped tokens have seen fairly stable market caps over the past week. Even amid the controversy, neither token has seen significant inflows or outflows.

And the market caps are very different:

· WBTC: 155,000 BTC

· tBTC: 3,000 BTC

WBTC does have a “crazy moat”! And it’s profit margins are very low. $9 billion worth of BTC only earned $12 million in fees. So it’s unlikely that WBTC will disappear anytime soon.

The liquidity and integration that wrapped tokens have accumulated over so many cycles will not be replaced quickly, especially if the tokens are functioning properly and remain Peg.

Nevertheless, if you want to promote a more decentralized future, you can consider minting tBTC when you want to transition from BTC to ETH. You can convert from wBTC to tBTC and convert it back to native BTC for safekeeping (or continue to use tBTC as DeFi collateral).

tBTC has good liquidity on the chain

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