Chainfeeds Introduction:
IOSG Ventures researcher Poopman analyzed the basic structure, implementation methods, on-chain scale and main risks faced by the BTC LRT ecosystem.
Source:
Article author:
Poopman
Viewpoint:
Poopman: tl;dr- There are two main forms of bridged BTC: one is regular BTC, such as wrapped BTC (WBTC); the other is heavily staked BTC on Babylon, which is BTC-LRT. -BTC LRT-Fi is still in its early stages, but has shown healthy signs of transitioning more TVL from BTC to the ETH DeFi ecosystem. - Due to the increasing recognition and market dominance of BTC in the current cycle, BTC adoption is expected to increase. The opportunity to generate yield for BTC also creates a market for speculative and trading activities on ETH. -WBTC remains one of the most widely adopted forms of BTC on ETH. However, due to the recent challenges associated with Justin Sun, tBTC or LBTC is expected to gain more adoption. - It is increasingly common to heavily stake BTC tokens in Symbiotic or Karak for leveraged farming. While this may generate higher returns, users must bear the risk of facing multiple slashings. - Currently, most BTC-related DeFi activities on ETH are mostly incentivized by points or rewards. To generate real demand, BTC LRT needs to create greater value (possibly in the form of yield) than ETH LST. - Custody risk, slashing risk, and liquidity risk are the main concerns in the BTC LRT space. [Original text in English]
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