Summary
BitGo’s wBTC is the leading tokenized bitcoin on other chains, but Nomic is introducing a decentralized alternative called stBTC using Babylon’s bitcoin staking protocol. This allows BTC holders to passively earn a yield on their bitcoin by converting it to nBTC tokens and minting stBTC through a staking pool. Nomic plans to implement a dual-stake security system using stBTC and NOM tokens. The goal is to offer a trust-minimized option for BTC holders to participate in DeFi while supporting the security of proof-of-stake systems.
Key Points
1. When it comes to tokenizing bitcoin on other chains, no one has reached any significant scale besides BitGo’s wrapped bitcoin (wBTC). Newer approaches aim to offer a non-custodial option for using BTC off of the Bitcoin blockchain.
2. The Nomic DAO Foundation is adding Babylon’s bitcoin staking protocol into its decentralized non-custodial Bitcoin bridge to create stBTC, which they call a Bitcoin Liquid Staking Token (LST).
3. BitGo custodies bitcoin and issues the wBTC token — predominantly as an ERC-20 on Ethereum and its layer-2s. It has amassed a market cap of $10.6 billion, more than fifty times its nearest rival, per CoinGecko.