According to London-based research firm Skew, the market capitalization of Wrapped Bitcoin (WBTC), an Ethereum token pegged to Bitcoin, has passed the 81 million mark.
Despite not gaining momentum during its first year, the most popular tokenized version of Bitcoin has witnessed tremendous growth over the past week, adding more than 2,000 BTC.
WBTC is bad for Bitcoin
WBTC, which launched in January, is your ordinary ERC20 token that is linked 1: 1 to your underlying asset through a smart contract.
The issuance of the token is controlled by members of the autonomous decentralized organization (DAO).
In addition to the fastest and cheapest transactions, the token's main selling point is its interoperability with dApps and the rest of the Ethereum ecosystem.
The cumulative value of all Ethereum-based Bitcoin implementations (like RenBTC and imBTC) recently passed the $ 100 million milestone.
As EthHub co-founder Anthony Sassano explained, this growth of Ethereum tokens is bearish for Bitcoin because your miners are losing transaction fees.
While WBTC can be publicly audited by anyone, the trust models of ERC20 Bitcoin tokens are troubling because the keys to all BTCs can be controlled by one party, according to Ethereum founder Vitalik Buterin.
Their concerns are not unfounded since BitGo acts as the sole custodian of the token.