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Franken-Bitcoin, New Token Standard, Cypherpunk Web

June 18, 2019

Hello defiers :) here’s my take on the most interesting stuff happening in DeFi today:

  • Binance is launching a Bitcoin-like coin for its DEX, while demand for Ethereum’s own wrapped Bitcoin spikes
  • Game developers made a new Ethereum token standard meant to make user experience more seamless
  • There’s now a relatively easy way to connect to and upload decentralized websites

Binance is Launching a New Franken-Bitcoin

Binance is launching BTCB, a Bitcoin-backed token that can be traded in the cryptocurrency exchange’s own blockchain, as bitcoin itself isn’t compatible with Binance Chain. BTCB is meant to give Binance’s decentralized exchange users access to a bitcoin-like instrument. BTCB is backed by real bitcoins so traders will be able to exchange BTCB for the real thing on Binance’s main platform, after getting their fix of alt-coin trading on the DEX.

Cryptocurrencies, an already hard concept to grasp, are made even harder for newcomers as the market is riddled with hundreds of different blockchains, including chains that split from their original parent, tokens that abide to different standards and don’t work together, different consensus algorithms, etc. This effort by Binance is another sign the trend will be for market participants to find ways to connect all these different pieces so that the end user can’t see the hot mess that’s happening behind the scenes.

Ethereans Pile on Discounted (Wrapped) Bitcoin

Meanwhile, in another corner of the crypto-verse, people started piling into another franken-bitcoin. A group of companies including BitGo and Kyber Network in January launched WBTC, or wrapped BTC, a bitcoin-linked ERC20 token. Same idea as BTCB, except this one is compatible with the Ethereum network. Total bitcoin exchanged for WBTC climbed to a record $3 million yesterday, according to Defi Pulse.

the-defiant

And since Kyber Network is one of the main markets for WBTC, demand for the token is probably what caused a spike in the network’s liquidity.

the-defiant

So what’s causing the increased WBTC demand? Maybe Ethereans saw the Binance announcement and were like, “hey, we have this too! let’s go buy some WBTC.” Maybe Bitcoin crossing $9,000 fuelled some FOMO for DeFi-based traders. It’s also likely people were taking advantage of WBTC trading at a big discount to BTC on Monday.

the-defiant

Maybe you were able to arbitrage, though Max Bronstein from Dharma made a good point when he responded to my tweet, saying it’s hard to make the trade as there’s not much liquidity and it takes two hours to actually mint WBTC.

New Ethereum Developments Thanks to Gaming

Continuing with the theme of inter-operability, there’s a new Ethereum token standard in town. There’s ERC20 (fungible tokens) and ERC721 (non-fungible tokens), and now there’s a standard that can make tokens fungible and non-fungible at the same time.

The new ERC1155 standard supports an infinite number of tokens instead of a specific kind. Singapore-based info-tech company Enjin developed it to be able to make better games, much like the ERC721 token standard was created by CryptoKitties’ makers.

An ERC1155 token would be able to to contain from a bundle of arrows, which can be indistinguishable from each other (fungible) and a pet dragon, with its specific characteristics and history (non-fungible), Enjin explains in a blog post.

Developers were already finding ways to exchange ERC20 and ERC721 (making wrapped CryptoKitties for example), but it’s a process that requires multiple steps and technical knowledge. If this standard catches on, it should make exchanging different types of assets, using them in dapps and storing them in wallets easier.

Websites… But on the Blockchain

There’s now an easy(ish) way to connect to and host websites directly on the Ethereum blockchain. The advantage? There’s no way to censor or take them down.

It’s not entirely for the mainstream user as you need to have Ethereum wallet Metamask installed on your browser, open a Javascript console, and copy and paste a string of code provided by the researchers at Cornell University who authored this project. See here.

Once you do all that, a pop-up will come up asking for a site ID and…

“Bam, instant censorship resistant websites on-chain for ~$100/MB. Put your DEX UI, political statements, or more on-chain today,” wrote Philip Daian, one of the researchers who made this. “No central servers!”

The only site that I believe has been uploaded has the ID of “0,” and it links to The Moral Character of Cryptographic Work, which calls for cryptographers to developer ways to resist mass surveillance. Very fitting.