Avalanche’s Golden Gate
Market Meditations | June 26, 2022
Avalanche has released a bridge directly to the bitcoin network.
- The direct bridge to the Bitcoin network was made possible by a feature of the Ava Labs browser-based Web3 wallet (Core).
- The bridge works by tokenizing Bitcoin as an Avalanche-based token called BTC.b, which can then be used in Avalanche DeFi applications.
- This bridging process is similar to wrapping on Ethereum, but unlike tokenized bitcoin solutions on Ethereum (WBTC), Ava Labs claims their process is non-custodial. When using WBTC on Ethereum, the bitcoin that you wrap is held in a centrally controlled smart contract, a layer of risk that often garners criticism.
- A Bitcoin pool on Platypus with $11.7 million in TVL offers yields from 23.72% to 62.84%.
- A BTC.b to AVAX pool on Trader Joe is offering yields of 17.5%.
- The multichain bridge will one day give Bitcoin users access to the Avalanche subnets, such as Defi Kingdoms or Swimmer.
Writers at Coindesk noted that AVAX soared 7.4% after the announcement. Still, Avalanche is no stranger to the woes that have befallen the entire market, losing more than $11 billion in TVL since December. Ava Labs release of the native bitcoin bridge and user-friendly products like the Core wallet are a testament to the term commonly used by developers in a bear market: “keep building.”
