BitGo’s WBTC Retains Over 65% Market Dominance Despite Criticisms of Custody Model: Report

Wrapped Bitcoin (WBTC), a wrapped version of Bitcoin developed by BitGo, Kyber Network and Ren, continues to dominate the tokenized BTC market despite criticism surrounding the project, according to the latest monthly report from Binance Research.

The wrapped token represents Bitcoin 1:1 on other blockchains such as Ethereum and Solana. This allows users to access BTC in the decentralized finance landscape.

WBTC holds more than 65% market share

Binance Research’s record showed that WBTC’s weekly transactions reached an all-time high of 123,200. For several weeks in a row, it also recorded over 100,000 weekly transactions for the first time. WBTC supply also increased to over 152,400 units, accounting for over 65% of the market share.

The current WBTC measurement is applaudable due to several factors. One of them is its creator’s decision in August to partner with BitGlobal and Tron founder Justin Sun to expand the asset’s operations to other jurisdictions like Hong Kong and Singapore. The partnership also aimed to rethink WBTC’s custody structure.

However, various members of the crypto community have criticized Sun’s involvement in the joint force. BitGo CEO Mike Belshe tried to calm things down by assuring users that the Tron founder could not single-handedly move funds. Following community backlash, crypto projects like Sky (formerly MakerDAO) proposed removing WBTC from its collaterals.

Within weeks of criticism from community members, other companies emerged with their Bitcoin tokens wrapped. One of the most popular is Coinbase’s cbBTC, a wrapped Bitcoin launched on Ethereum and Base. Shortly after its debut, cbBTC became the third largest wrapped Bitcoin.

Ethereum becomes inflationary

Another problem with the market report is that Ethereum is currently leaning towards inflation. Over the past month, its inflation has reached a level not seen in two years.

Ethereum claims to adopt an ultrasonic monetary system, which makes ETH resistant to inflation while strengthening purchasing power. However, the Binance Research report shows that the second largest cryptocurrency is moving away from the deflationary zone.

Following the Dencun upgrade, the network experienced a drop in transaction fees, which resulted in fewer ETH coins being burned. With ETH issuance rate reaching around 0.74% in 30 days, market observers believe that the coin is entering the inflationary zone.

Binance Research said it would return to deflationary status if there was a significant increase in network activity on mainnet.