Track market-moving stories before they get noisy

Wrapped Bitcoin (wBTC), one of the most widely used Bitcoin derivatives across the Ethereum ecosystem, has announced security measures amid ongoing DeFi contagion fears. 

On Thursday, the project said it is upgrading its cross-chain DVN configurations, which would be done by Sunday, 26 April. It added, “These updates are precautionary and reflect our ongoing approach to maintaining robust security standards across integrations.”

For perspective, DVN (decentralized verification network) is the system that the attacker exploited on LayerZero, exposing the Kelp DAO protocol to lose $293 million. 

However, the KelpDAO had a simplified DVN set-up that needed only a single verifier.  This made it easier for the attacker to exploit the flaw. 

As such, the wBTC team may be upgrading to a multi-signature system that needs more than two verifiers before assets move across chains. 

Beyond hardening security systems, the project also placed a temporary pause on transfers across LayerZero. 

WBTC OFT service via LayerZero will be temporarily paused. Service will resume once the root cause is identified and it is confirmed safe to proceed.

Why a secure wBTC is crucial For clarity, the KelpDAO exploit leveraged rsETH, a low-quality collateral, and swapped it for other higher-quality assets. Despite targeting a low-quality asset that is not widely used, the impact has been significant. 

KelpDAO lost $293 million while contagion fears across lending markets triggered over $15 billion outflows from Aave. Before the attack, KelpDAO restaked ETH (rsETH) had a market cap of $1.6B and 22.8K holders. 

On the other hand, WBTC has 180K holders, including major tier-1 exchanges like Binance. It has a market supply of $9.2 billion. Besides, it is the most liquid and widely used in DeFi platforms across Ethereum and Solana DeFi ecosystems, commanding a 44% market share.

Coinbase’s wrapped Bitcoin [cbBTC] comes in second with about 28% market share. 

Source: Dune Over 70% of wBTC supply is locked in lending protocols and standalone buy-and-hold. In other words, a similar exploit would trigger a deeper DeFi run, noted analyst Ignas. 

Got chills down my spine thinking if wBTC got hit with DVN attack. That would’ve touched every DeFi protocol as well as multiple CEXs who store wBTC.

That said, wBTC only saw about $400 million in outflows in the first two days after the KelpDAO exploit. Since 21 April, Tuesday, it has seen net inflows, underscoring resilience. 

Source: DeFiLlama  Final Summary Wrapped Bitcoin (wBTC) continues to harden its security systems to minimize the risk that exploited KelpDAO.  The product has been relatively resilient despite broader DeFi outflows led by Aave’s $15B bleed out. 

Table of contents

Satoshi Protocol, a prominent stablecoin protocol that gets support from Bitcoin, has announced an exclusive collaboration with Soveryn. The partnership between Satoshi Protocol and the BOB chain-based DeFi protocol Sovryn will unveil a SAT-wBTC pool to boost the utility and liquidity of SAT in the BOB ecosystem. The platform disclosed the development on its official account on X.

Partnership with @SovrynBTC
​
Our collaboration introduces a new SAT-wBTC liquidity pool, boosting $SAT utility and trading options on BOB.
​
Thrilled to announce our partnership with @SovrynBTC, the leading BTCfi Hub on the BOB chain. They offers secure, fast Bitcoin trading… pic.twitter.com/hV6n4rWj2K

— Satoshi Protocol (@Satoshi_BTCFi) July 31, 2024 Satoshi Protocol Commences an Exclusive Collaboration with Sovryn In its latest X post, the company mentioned that Sovryn operates as a decentralized finance protocol on the BOB chain. It reportedly offers several financial services taking into account liquidity provision and trading. Sovryn benefits from the security of Bitcoin along with the smart contract flexibility to deliver resilient financial instruments. Sovryn has additionally attained crucial landmark achievements.

They include more than $85M in its total value locked part from more than $2B worth of cumulative trading volume. Additionally, the total consumer base of the platform has reportedly reached 60,000. Sovryn is integrated with the BOB chain, expanding its platform with diverse integrations and financial services. Moreover, Sovryn delivers decentralized trading, margin trading, borrowing, and lending tools.

Bitcoin network secures all of these products. This partnership will permit the development of a Sovryn-based SAT-wBTC pool. The integration will chiefly enhance liquidity for SAT. As a result of this, the consumers can conveniently trade between the SAT token and the rest of the Sovryn-based coins. This takes into account the well-known tokens such as USDC, ETH, SOV, wBTC, DLLR stablecoin of Sovryn, and so on.

Improved liquidity signifies that the clients can conduct trades more effectively with decreased slippage and enhanced pricing. The integration of SAT within the ecosystem of Sovryn broadens its utility. It provides additional opportunities to facilitate the consumers in engaging with assets. The inclusion in the extensive DeFi package of Sovryn lets SAT holders take part in a broad series of financial operations.

The Development Enhances Liquidity, Capital Efficiency, and Utility in the BTC Ecosystem It includes generating yields via liquidity provision and using SAT in the form of collateral concerning loans. Ingamar Ramirez, Sovryn’s Head of Ecosystem Growth, stated that this collaboration will let them offer additional options regarding decentralized stablecoins. Satoshi Protocol asserted that the partnership will combine the strengths of both entities to capital efficiency, liquidity, and utility in the BTC ecosystem.

AUTHOR

Umair Younas is a cryptocurrency-related content writer linked with this work since 2019. Here, at Blockchainreporter, he serves as a news and article writer. He is a crypto, blockchain, NFTs, DeFi, and FinTech enthusiast. He has strong command over writing authentic reviews about brokers and exchanges and he has collaborated with our education team to write educational content as well. He has a dream to raise awareness among people about digital currencies. His works are well-researched and brimmed with information hence they provide fresh insights. Stay tuned to his posts if you want to stay up-to-date with the crypto-verse.