Bitcoin is becoming more and more present on the Avalanche ecosystem

There are many bitcoin bridges on different blockchains however that of Avalanche is gaining ground and could even become more important than the Lightning network.

Some information about BTC.b

BTC.b is a bridged version of Bitcoin that is native to the Avalanche C-Chain. It was launched in January 2023 as part of the Avalanche Bridge. This bridge allows users to transfer assets between the Bitcoin and Avalanche networks. BTC.b is fully backed by bitcoins that are locked in a smart contract on the bitcoin network. This ensures that the value of BTC.b is always equal to the value of the underlying bitcoin.

The popularity of BTC.b has steadily grown since its launch. In May 2023, over $28 million worth of BTC.b was transferred to Avalanche. BTC.b is currently integrated with a number of DeFi protocols on Avalanche. Including Platypus Finance, Benqi, and Trader Joe. This allows users to earn returns, participate in liquidity pools, and trade BTC.b on Avalanche.

BTC.b is a promising project that has the potential to make Bitcoin more accessible to DeFi users. This is still a relatively new project, but it has already seen significant growth. BTC.b is expected to continue to grow in popularity in the future as other DeFi protocols integrate with it.

Here are some of the benefits of using BTC.b:

• BTC.b is fully Bitcoin-backed, so you can be sure your investment is secure.
• BTC.b can be used to earn a return on Avalanche, which is not possible on the Bitcoin network.
• BTC.b can be used to participate in liquidity pools and trade on Avalanche. Which gives you access to a wider range of DeFi opportunities.

During our exclusive interview with the founder of Ava Labs, Emin Gün Sirer even informed us that there is more volume on the BTC.b than on the Lightning network. Indeed, if we look at CoinMarketCap on May 15, 2023, we see that the 24-hour volume of the Lightning network is $176,000 while the 24-hour volume of BTC.b is almost $4.2 million. Bitcoin has also broken a new record with more than a million addresses owning at least 1 BTC.

BTC.b is not the only bitcoin on the network

During the Avalanche Summit, we also have the opportunity to discuss and listen to the Catalog teams. Catalog is developing a BTC-AVAX bridge that works on a web wallet allowing you to have BTC and tokens from the Avalanche network in native version on the same wallet. It will thus be possible to bridge BTC very quickly into AVAX or other cryptocurrencies, without going through BTC.b. This solution could appeal to Bitcoin maximalists who do not wish to have a cryptocurrency like BTC.b.

Jaz Gulati, the co-founder of Catalog explains the main problems with current versions of bridged tokens, especially bitcoin.

First of all there is the need to recreate liquidity pools: to trade a wrapped asset, for example xBTC to USDC on Ethereum, you need to create a new x*y=k liquidity pool on Uniswap for both assets. This usually means enticing users to migrate liquidity from existing pools, such as ETH/USDC. To minimize the amount of slippage in the new pool. When introducing new chains (Optimism, Aptos, Solana, etc.), this process is repeated, leading to further fragmentation of liquidity and therefore lower rates.

Next, bridged tokens require gas tokens for account operations. To send or exchange a wrapped asset like xBTC on Ethereum, you must hold ETH for gas fees, even if the exchange does not involve ETH at all (e.g. xBTC to USDC).

Finally, the confirmation delay for the bridge: to use bitcoins in a dApps with a wrapped asset, you must first link them to the corresponding chain, which can take more than an hour depending on the confirmation delays. To revert to native bitcoin, you need to repeat this process in the opposite direction.

The future of Bitcoin on Avalanche and other blockchains therefore remains a major topic of innovation and creation. Will bridges like BTC.b prevail or will the native version of Bitcoin as Catalog envisages become the solution of tomorrow? Case to follow!