{"id":1571,"date":"2020-09-07T11:57:36","date_gmt":"2020-09-07T03:57:36","guid":{"rendered":"https:\/\/www.btse.com\/blog\/?p=1571"},"modified":"2023-06-27T10:17:13","modified_gmt":"2023-06-27T10:17:13","slug":"btse-defi-introducing-wrapped-btse-token","status":"publish","type":"post","link":"https:\/\/www.btse.com\/blog\/btse-defi-introducing-wrapped-btse-token\/","title":{"rendered":"BTSE DeFi: Introducing Wrapped BTSE Token"},"content":{"rendered":"
The rise in popularity of Ethereum ERC20 tokens and DeFi has been unprecedented. At the time of writing, more than 9 billion dollars has been locked in DeFi<\/a>.<\/span><\/div>\n

“Wrapping BTSE token to an ERC20 token allows BTSE to take part in the DeFi ecosystem.”<\/em><\/span><\/p><\/blockquote>\n

Ethereum ERC20 tokens have advantages, and we decided to make use of them. We are introducing the wrapped BTSE<\/a> token, which is an ERC20 token that represents the BTSE token.<\/span><\/p>\n

Wrapped BTSE token utilizes a custodian model to implement the tokenization of the BTSE token on Ethereum. Each wrapped BTSE token is minted into existence, and there is an equivalent amount of BTSE token held in custody at a 1:1 ratio.<\/span><\/p>\n

The wrapped BTSE token remains in circulation until the BTSE token backing is withdrawn, and the equivalent wrapped BTSE tokens are burnt.<\/span><\/p>\n

By wrapping BTSE tokens into an ERC20 token, it leverages the Ethereum network to enable new applications and use cases for BTSE tokens by combining the liquidity and adoption of BTSE tokens with the ecosystem of Ethereum. It expands BTSE token usage by facilitating more decentralized use cases, such as trading BTSE tokens on decentralized exchanges, loans, borrowing, and payments.<\/span><\/p>\n

If this reminds you of WBTC or Wrapped BTC, then you\u2019re right. BTSE is currently using Liquid, but Liquid has 0 tractions on exchanges, and we can\u2019t expect them to support Liquid. By letting users choose the Ethereum network, we open up the possibility to get listed on decentralized exchanges such as Uniswap or Sushiswap.<\/span><\/p>\n

We are not abandoning Liquid, and its privacy features. Still, the popularity of Ethereum network effects is undeniable, and we are excited to expand the reach of BTSE tokens to a broader, more positive community.<\/span><\/p>\n

 <\/p>\n

Liquidity on Decentralized Exchanges and DApps<\/strong><\/h2>\n

Most decentralized exchanges, for example, Uniswap and Sushiswap offer only Ethereum ERC20 token support and no support for Liquid tokens.<\/span><\/p>\n

By wrapping BTSE tokens into an ERC20 token, we can bridge this gap and provide more liquidity on decentralized exchanges. Also, this can open up a lot more opportunities for BTSE token holders such as opening the doors to decentralized applications\/protocols (like funds, and lending payments) and providing liquidity on Uniswap and profit from AAM (automated market-making).<\/span><\/p>\n

Uniswap has become very popular since it allows anyone to swap tokens easily without the need for KYC, liquidity pools, and automated market-making.<\/span><\/p>\n

 <\/p>\n

Interoperability Between Cryptocurrencies<\/strong><\/h2>\n

Wrapping the BTSE token into an ERC20 token opens all the capabilities the Ethereum blockchain offers. One ability is for initial coin offerings (ICOs) to be directly funded and mint tokens on deposits of wrapped BTSE tokens.<\/span><\/p>\n

Another advantage is that in the future, centralized exchanges and other institutions which accept cryptocurrencies won\u2019t need to maintain multiple nodes or bother with liquid integration and instead could make use of the Ethereum network to integrate BTSE token support.<\/span><\/p>\n

 <\/p>\n

Minting<\/strong><\/h2>\n

Minting refers to the process of creating new wrapped BTSE tokens. Minting has to be done by a custodian but needs to be \u201cinitiated\u201d by a merchant. It\u2019s a set of transactions done between two.<\/span><\/p>\n

The minted supply Etherscan link can be found here: https:\/\/etherscan.io\/token\/0x666d875c600aa06ac1cf15641361dec3b00432ef<\/a><\/span><\/p>\n

 <\/p>\n

Burning<\/strong><\/h2>\n

Burning refers to the action of redeeming BTSE tokens for wrapped BTSE tokens. Only merchant addresses can burn the wrapped tokens. The \u2018burn\u2019 function is called in the contract with the amount of tokens to burn on the Ethereum chain and the amount will be deducted from the merchant\u2019s wrapped BTSE token balance, which leads to the supply of wrapped BTSE tokens being reduced.<\/span><\/p>\n

To summarize, the BTSE supply remains the same. On the Liquid side, we lock up tokens representing the number of BTSE tokens on Ethereum and unlock them if they are moved back. We will publish a treasury address<\/span><\/p>\n

Initially, early adopters already converted 1,000,000 in BTSE. Will transfer those and give you an address.<\/span><\/p>\n

It will operate like Tether, where the user can choose the network. With Tether, you can select the OMNI or Ethereum network. This will be the same for the BTSE token to keep it user-friendly.<\/span><\/p>\n

<\/h2>\n

Atomic swaps<\/strong><\/h2>\n

Atomic swaps can be used between merchants and users to exchange wrapped BTSE tokens and BTSE tokens. If the user would like to receive BTSE tokens on the Ethereum network or BTSE on Liquid more quickly, a trusted method of exchange could also be done through the merchants.<\/span><\/p>\n