Things to Know Before Converting FTM to WBTC
Decentralized finance (DeFi) is definitely one of the most active sectors in the crypto ecosystem. It has attracted many new users, as well as pushed for the launch of new blockchains and tokens. Fantom is one of the projects that were created to foster DApps, like decentralized exchanges for the DeFi ecosystem. And Wrapped Bitcoin, on the other hand, was created to offer investors a way to transact with an asset pegged to Bitcoin’s value, while using DeFi protocols. If you want to convert FTM to WBTC, this guide will give you everything you need to know about these projects.
Fantom — DeFi of Tomorrow
Fantom is a project launched in 2019 as an alternative to Ethereum. Unlike most cryptocurrencies, it’s not exactly a blockchain. Instead, it’s built using an infrastructure called Directed Acyclic Graph (DAG). Fantom developers claim this to be more efficient and scalable. For example, it can validate transactions in under 2 seconds. Despite being an alternative, Fantom is compatible with the Ethereum Virtual Machine (EVM). This means that developers can easily migrate DApps from one network to another, since both structures are quite similar.
FTM Market Performance and Tokenomics
Despite having its own network, the FTM token is also available on other blockchains, such as Ethereum, BSC, or Solana. This brings a lot more volume to the token, which currently trades around $66.8 million daily. Its market capitalization is $1.2 billion, ranking #64 in coin aggregators.
Similar to most cryptos in the market, the price of FTM started rising around October 2023. It gained over 500% between October and March. However, since then it has lost around 50%, and it’s worth around $0.48 at the time of writing.
Wrapped Bitcoin — Power of Bitcoin with ERC-20 Token Flexibility
Wrapped Bitcoin is a token pegged to the value of Bitcoin, but running on other blockchains. It initially launched as an ERC-20 token on Ethereum, but now it’s available on over 30 chains, both Layer-1 and Layer-2. It was created as a joint initiative between BitGo, Kyber Network, and Ren. The goal of WBTC is to take advantage of Bitcoin as the most valuable asset in the market, but making use of it in DeFi protocols.
WBTC Market Performance and Tokenomics
In order to mint new WBTC, buyers must deposit BTC in the protocol wallet. These coins will be locked and mint WBTC for the customer. When they wish to retrieve their BTC, they can start a burn request to destroy some WBTC and withdraw BTC.
At the time of writing, WBTC has a market capitalization of over $10 billion and a daily trading volume of $300+ million.
FTM to WBTC: Pros and Cons
It’s hard to predict which is the next crypto to explode in 2024 between FTM and WBTC. The latter has the advantage of being pegged to Bitcoin — an asset that seems to be performing very well. However, FTM is a solid project and, although it’s not the most popular Ethereum alternative, there is a strong community around it. This means that Fantom is likely to grow in price and market volume. Besides, Fantom is both the governance token of its own chain and an investment token on other chains. This exposes the asset to two vectors of growth. WBTC, on the other hand, only depends on the growth of BTC.
Conclusion
Swapping FTM to WBTC can seem like a wise investment strategy, but it’s important to take into account the usability of both tokens. In the end, WBTC has a larger market capitalization at the moment, but FTM has a lot of potential for growth.