Bitcoin in DeFi

How much Bitcoin is locked up backing wrapped and staked versions of it on other chains, and how big Bitcoin's own DeFi layer actually is.

Common questions

What does it mean for Bitcoin to be locked in DeFi?

Bitcoin cannot move to another blockchain, so a protocol takes custody of real BTC and issues a token elsewhere that stands for it. WBTC on Ethereum is the largest example. The Bitcoin does not go anywhere - it sits in custody addresses, and the token is what circulates. Redeeming the token is what releases the coins again.

Why count in BTC rather than dollars?

Because the quantity of Bitcoin held is the fact, and the dollar figure is a translation of it that changes when the price does. A custody balance can be flat for a month while its dollar value moves twenty percent. Counting coins separates what the protocols did from what the market did.

Is the same Bitcoin counted twice?

No. Only Bitcoin held on the Bitcoin chain is counted. Several protocols hold wrapped Bitcoin on other chains - a staking protocol holding WBTC on Ethereum, for instance - and that Bitcoin is already counted once, in the custody balance of the wrapper that issued it. Counting it again in both places would inflate the total.

Does this prove the wrapped tokens are fully backed?

It does not. These are the balances the protocols report, as measured by DefiLlama. A real proof of reserve means checking the custody addresses on the Bitcoin chain and comparing them to the supply of the token issued against them. That check is not done here, and the figures should be read as what is claimed rather than what is verified.