On September 7, BTSE, a crypto derivatives exchange, introduced the wrapped BTSE token in an ambitious move that will allow users to take part in decentralized finance (DeFi).
The wrapped BTSE token is essentially an ERC20 token that utilizes a custodian model to implement BTSE tokens’ tokenization on the ETH blockchain.
In an official blog post, BTSE explained that they chose to wrap their native tokens into an ERC20 token to enable new applications and use cases in DeFi.
The exchange noted that the DeFi space had seen unprecedented growth in recent months, having currently locked in more than $8 billion in various liquidity pools.
The move to wrap the BTSE token now combines the liquidity and adoption of BTSE with the Ethereum ecosystem. This integration allows the native token to be listed on DeFi protocols such as Uniswap or Sushiswap.
Exchange Expands Reach to Broader Community
BTSE utilizes Bitcoin and crypto technologies to develop financial solutions for users and introduce innovative digital assets to the traditional finance sector.
The exchange currently offers a suite of financial services that includes spot and derivatives trading, OTC, and lending services.
The latest development to wrap the project now opens the door for the token to expand its reach to a broader community.
Advanced use cases for BTSE are achievable only by leveraging Ethereum ERC20 token support, which hosts most existing decentralized exchanges today.
BTSE is currently issued on Liquid Network, which offers no support for DeFi. BTSE has now bridged the gap between the ETH and Liquid ecosystems, offering more opportunities for BTSE token holders to access DeFi services such as decentralized lending.
The wrapped ERC20 token also facilitates users to provide liquidity on platforms like Uniswap and earn yields from automated market-making.
Wrapped BTSE Offers Attractive Use Cases
Besides lucrative use cases such as funding a liquidity pool on Uniswap to earn interest, the Wrapping of BTSE can also facilitate integration into various decentralized exchanges and leveraged trading protocols.
The new token, which functions much like Wrapped BTC (WBTC), could also enable initial coin offerings (ICOs) to be directly funded and mint tokens on wrapped BTSE tokens deposits.
Another possible use case for the wrapped token is in centralized exchanges and other institutions which accept crypto. Such industry players won’t need to maintain multiple nodes or bother with liquid integration in the future.
Instead, they will only need to make use of the ETH network to integrate BTSE token support.