According to data from Dune Analytics on July 24, the amount of Wrapped Bitcoin (wBTC), a synthetic form of Bitcoin, circulating on Ethereum has fallen by 44% since May 2022. In July 2023, wBTC circulating on Ethereum stood at approximately 158,000 BTC, a sharp decline from 282,000 BTC recorded in May 2022.

Interestingly, on-chain records also showed that the amount of wBTC minted and circulated in Ethereum, primarily for decentralized finance (DeFi) purposes, continued to rise in the first five months of 2022. It peaked in May 2022 amid a market-wide contraction of crypto prices that saw Bitcoin cool off from 2021 peaks of over $69,000.

BTC On Ethereum Falls

Bitcoin holders often tokenize their coins, converting them into ERC-20 tokens in Ethereum to participate in various DeFi activities. These engagements may include staking to increase returns, yield farming to maximize returns, lending, and borrowing to receive USDT or DAI and other coins through platforms like MakerDAO.

Among the popular tokenized Bitcoin are wBTC, renBTC, tBTC, and others. However, as of July 24, a significant percentage of tokenized Bitcoin in Ethereum was wBTC, with over 158,000 tokens circulating. Users also chose other platforms to mint hBTC and renBTC.

The decline in tokenized Bitcoin highlights the general state of DeFi in Ethereum and other platforms, including BNB Chain, Avalanche, and Polygon. As of July, there has been a marked decline in DeFi activity over the past year from the number of assets locked in various protocols across the ecosystem.

DeFi Activity Decimated By Bears

DeFiLlama 
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Author: Dalmas Ngetich

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