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Wrapped Bitcoin (WBTC) Goes Live on Ethereum Blockchain; Much-Needed Liquidity to DEX, DeFi Sectors

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Well, they left it to the penultimate day of the month, but those behind the Wrapped Bitcoin (WBTC) project have made good on their promise of a January launch after today saw the ERC20-compliant version of the bitcoin (BTC) cryptocurrency go live on the Ethereum (ETH) mainnet.

For those that need reminding, the Wrapped Bitcoin project was unveiled late last October by its three founding projects – Kyber Network (KNC), BitGo and (the formerly named) Republic Protocol (REN). It was borne out of a desire to add much-needed liquidity to the Ethereum network; a problem that has negatively impacted the user-experience on various Ethereum-powered non-custodial exchanges (e.g. IDEX, ForkDelta, Ethfinex Trustless) and lending platforms (e.g. Dharma, Lendroid, Compound).

Looking to the orderbook – where all minting and burning of WBTC is recorded – the first day of WBTC’s existence on the Ethereum mainnet has seen the supply of the bitcoin-backed ERC20 token balloon to 65.42, at the time of writing – the equivalent of $223,169 (USD).

Notably 50 of this 65.42 WTBC – or, 76.4 percent – was minted by Kyber early on Monday morning. Together with crypto liquidity firm Prycto – who has minted 12.18 WBTC – the two projects account for a whopping 95 percent of all WBTC in existence.

Whilst there is an impressive total of 24 launch partners for the WBTC project, just seven of these are so-called ‘merchants’, that is, the projects responsible for interacting with custodians so as to mint and burn WBTC and provide KYC/AML for users.

With Kyber and Prycto being two of these seven, the remaining five are as follows: AirSwap (AST), Dharma, Ethfinex, GOPAX, Ren (formerly Republic Protocol), and Set Protocol. Once these projects begin minting, expect to see the WBTC network total increase significantly. Currently, the only destination available for these seven projects to go to create wrapped tokens is WBTC co-founding corporation, BitGo.

It will be interesting to note the rate of adoption WBTC sees moving forward. Certainly, it appears a godsend for the nascent open finance space running on Ethereum, not to mention the numerous non-custodial exchanges that, due primarily to debilitated liquidity, are seeing all-time lows in terms of USD traded value – according to the most recent issue (i.e., v3.3) of Diar.

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NEO to Ethereum: NKN Seeking “Improved Liquidity” as Token Swap Announced

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The team behind NKN (NKN) – described as “a new generation of highly scalable, self-evolving and self-incentivized blockchain network infrastructure” in its whitepaper – have proposed a one-to-one token swap from the extant NEP-5-compliant NKN token to one that is compliant with the Ethereum network’s ERC-20 standard.

NKN’s decision, according to their announcement published on Friday, was “based on feedback from community members, institutional investors and leading digital asset exchanges.” Without knowing for certain, one would suspect that much of this feedback concerned a lack of liquidity regarding NKN’s token. Indeed, NKN made a point of suggesting “improved liquidity” would come about as a result of the token swap.

Until today, just five cryptocurrency exchanges – gate.io, Switcheo, BCEX, Bitrue, and LATOKEN – had listed NKN’s NEP-5-compliant token. For one reason or another, a lack of liquidity appears a common problem facing projects who decided to conduct their initial coin offering (ICO) on top of the NEO blockchain.

When one takes a look at the listed digital assets on top-tier crypto exchanges like Binance, Bithumb, Huobi Global and Coinbase, the dearth of NEP-5-compliant tokens quickly becomes telling.

It is worth noting that the liquidity of the NEP-5 NKN token – a so-called ‘placeholder’ token (i.e., another token swap will occur once NKN launches on mainnet (planned for June 2019)) – was close to being a non-issue for the NKN team and its investors.

Indeed, last July, NKN featured in the controversial eighth round of Binance’s Community Coin of the Month event whereby Polymath (POLY) was declared the winner despite tallying less votes than each of Mithril (MITH), NKN (NKN), and Libra Credit (LBA).

NKN stated on Friday that NKN token holders can swap to the ERC-20 variety up until March 31st, pending any change “due to demand.” Importantly, holders of the current NEP-5-compliant token are not required to partake in the token swap. For those that wish to, we encourage you to check out this step-by-step guide created by NKN.

The NKN team also reinforced that, because the optional token swap is to be executed at a ratio of one-to-one, “there [will be] no change to total number of NKN token issued or token economics.”

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Coinbase Considering Adding Ripple (XRP)

During a year where many cryptocurrency investors are having their faith tested – Ripple (XRP) has stood out as a cryptocurrency project that has gained more traction than ever. Specifically, Ripplenet has recently formed a partnership with the multi-billion dollar Malaysian group CIMB. However, this isn’t the only partnership that Ripple – based in San Francisco – was able to forge this year.

Gaining Ground

Ripple also was able to announce partnerships with globally-known companies. For example, they also formed a partnership with Santander and American Express specifically for US-UK payments. A Top 10 U.S. bank, PNC, has also apparently seen the value in Ripple with regards to international payments. These moves have propelled XRP to becoming the second-largest cryptocurrency by market capitalization, moving Ethereum to third place.

There is an advantage with using XRP, and it isn’t surprising that many financial institutions are looking into partnering with Ripple. This is because XRP allows users to enact transactions in real-time, instead of through the traditional financial system, which often take days. It is easy to see how international companies would value real-time settlements regarding transactions, rather than waiting days for payments.

Ripple has even parodied the inefficiency of banks in an advertisement that many in the cryptocurrency community have praised for its humor and insight. In the commercial, a banker travels extensively, through all sorts of terrain, in order to directly deliver cash to another individual. The commercial also displayed the text: “Why is it possible to instantly send a message, but with payments, it’s sometimes faster to board a plane and fly it there yourself?”  The advertisement is titled: “Faster Cross Border Payments Shouldn’t Require A Boarding Pass” and can be seen below:

The momentum doesn’t appear to be slowing for Ripple. Coinbase, one of the most well-known and influential companies in the cryptocurrency sector, and valued in the billions – is considering adding support for a “broad range of assets” – including Ripple.

It wouldn’t be a stretch to say that Ripple would be one of the first choices for Coinbase, considering that Coinbase has added coins with a lower market capitalization, and more controversial coins, as well, such as Zcash. Time will tell whether San Francisco-based Coinbase will finally add Ripple, but it certainly appears that it could happen fairly soon.