As quoted in our latest Q3 Decentralized Finance Ecosystem Report, Q3 2020 has been the best quarter for the DeFi ecosystem. Total Value Locked (TVL) has crossed the $10 billion mark.
As per the DappRadar DeFi page, the TVL in Wrapped Bitcoin (WBTC) has surpassed $1 billion and stands currently at $1.11 billion.
Within this overview, we will analyze TVL and daily wallet activity of WBTC’s top dapp contributors: Uniswap, Curve, and Compound.
N.B: The DeFi ecosystem refers to Decentralized Finance and Decentralized Exchange dapps.
Key Takeaways
- Wrapped Bitcoin represents 10% of the TVL within the DeFi Ecosystem.
- WBTC daily active wallets increased by 47% in September.
- Top dapps within the DeFi ecosystem account for 51% of the increase of WBTC TVL. Uniswap is the biggest contributor, followed by Curve and Compound.
WBTC represents 10% of the TVL within the DeFi Ecosystem
Wrapped Bitcoin is an ERC-20 token pegged to Bitcoin. Those interacting with DeFi use WBTC as collateral to access the powerful world of Ethereum DeFi protocols. The growing Ethereum DeFi ecosystem has helped WBTC to grow month over month.
As per DappRadar’s DeFi page, WBTC is now the fourth largest DeFi token in terms of TVL currently representing 10% of the ecosystem.
We witness the steady growth of WBTC in the chart below. Increasing from $0.09 billion to $1.11 billion since July 2020. Meanwhile, Adjusted Total Value Locked (aTVL) has not surpassed $1 billion but did increase by 158%.
By the end of Q3 2020, WBTC increased its TVL by 136% compared to August 2020.
In regards to the daily active unique wallets, the figure increased gradually along with the increase in WBTC’s TVL. Active unique wallets did however skyrocket in September by more than 2,500. Growth of 47% compared to August.
Top DeFi ecosystem dapps account for 51% of WBTC TVL
As reported in our Q3 Decentralized Finance Ecosystem Report, TVL surged by 380% from the end of Q2 2020 reaching $10 billion by the end of Q3 2020.
The chart below gives a clear picture of the percentage increase of WBTC TVL in top dapps. Which accounts for 51% of the TVL in WBTC.
The biggest contributor is Uniswap. The increase in WBTC’s TVL in Uniswap has been driven by users who provided liquidity to the WBTC/ETH pool. Since UNI tokens were released early in September, they affected the market in a positive manner which is evident when looking at the growth of WBTC.
The TVL of WBTC in Uniswap increased by 11,882% in September compared to August 2020 and the trend has continued to date.
The second biggest contributor is Curve which is an automated market maker of stablecoins. The TVL of WBTC in Curve increased by 136% by the end of September compared to August 2020.
After the release of the COMP token and the yield farming trend that ensued Compound made its mark in the market and also increased the TVL of WBTC by 81% in September compared to August 2020.
Although the TVL of WBTC in Balancer decreased by 24% at the end of September 2020. It does still have a share of the total 51% of TVL in WBTC.
Conclusions
The DeFi ecosystem is growing and becoming more interconnected. This is highly encouraging, but it also carries risks.
September has been an interesting month in the DeFi Ecosystem. The release of the UNI token impacted the market greatly.
One such impact is the TVL of Wrapped Bitcoin surpassing $1 billion for the first time.
However, it is important to keep in mind that the sector is still young and it is important to look beyond the headline figures.
As always we will continue to monitor and report on the space.
