BTC locked in Defi continues to climb and that is bullish for its price...

in LeoFinancelast month

The number of BTC locked in Defi platforms continues to rise, which is technically a good thing for the price

The price of bitcoin continues to drift sideways but the amount of BTC locked up in Defi projects continues to rise.

As I type we are getting close to 100k BTC locked in Defi...



With the vast majority being locked in WBTC.

The vast majority of this locked bitcoin is now sitting on the Ethereum blockchain, with roughly $900 million worth of BTC now residing there.

For those doing the math that is up 40% already month over month.

Wrapped Bitcoin and renBTC remain the most popular transfer protocols, but Huobi’s HBTC has recently surged as well:



Cool, but what does this all mean?

Well, it means that people holding bitcoin are tired of just HODLing bitcoin.

They are looking to pick up some yield while they hold bitcoin.

Which is likely a good thing for the price of bitcoin going forward.

It seems rather likely that if people are able to earn a decent return from their bitcoin, they probably have less of an incentive to sell it.

I have seen this play out several times with people that I talk to.

People are content locking up their BTC and earning 6% or so and not even worrying about it any longer.

Whereas previously they were trying to flip it and add more BTC to their holdings by trading it on exchanges.

If more and more BTC gets locked up in this regard it removes potential selling pressure and makes it 'easier' for the price to move up.

Plus it also removes the incentive of people to sell their bitcoin to chase the next hot altcoin.

They can stake their btc and still chase high flying coins.

It's pretty much offering the best of both worlds for crypto investors.

The ability to hold digital gold while also participating in the high flying altcoin market.

I suspect that over time this is going to help push the price of bitcoin higher and higher.

When you combine this phenomenon along with all the other things bitcoin and crypto has going for it right now, the next 12-15 months look like they could be a lot of fun for crypto investors.

Stay informed my friends.


Posted Using LeoFinance


Could you also explain how to stake bitcoin please?

Cardboard explain it very well below. and Blockfi have nice passive options where they lend your BTC out and pay you 6% or so for allowing them to do so.

Ah yes, totally forgot about blockfi 6% APR on BTC. But it's not a defi and you need KYC there :(

Yes, though I think technically it could be classified as defi. I mean you are agreeing to have blockfi lending out your bitcoin and they are paying you a percentage to do so. Your coins are locked as well for a day or two if you try to move them.

You can't stake bitcoin but you can sell your btc for wbtc (wrapped btc on eth network) and:

  • lend it (low apr)
  • use it as collateral to take a loan
  • use the loan to buy stablecoins and lend them (around 6% apr)
  • use the loan to buy other coins (for example eth and usdt) and use them to provide liquidity on defi swaps, like uniswap - best apr (50%+) :)

50% APR, wow I didn't realize it was that high. Are you doing that currently?

Yup :)

Screenshot_20200913 Uniswap Info1.png

The +42% at the end is yesterday's ROI*365 but it should be calculated as compound percentage because your profit is automatically added to your liquidity.

So if it's around 0.115% daily (42%/365), 1.00115^365 = 72%
In fact it's a little higher because the profit is added to liquidity after each transaction (so like every minute), not once daily (so the compounding? is happening like every minute, not once daily but it's not a big difference for the final score).

Of course there's always a chance that someone will create a better protocol than Uniswap and the volume will move to other platform (and volume = fees = profit for liquidity providers).

One other option is where you lend ETH based crypto to margin traders for flash loans. It's basically a casino :D but the lend APR on stablecoins is also 50%+ - but it's higher risk than providing liquidity as far as I know.

Interesting stuff. Which ones are you using specifically?