Compound Users Can Now Earn Interest on Wrapped Bitcoin (WBTC) Tokens

Compound, a decentralized finance protocol that lets users loan and borrow several cryptocurrencies, has recently added wrapped bitcoin (WBTC) to its platform.

This means anyone with an Ethereum wallet can use the protocol to lend WBTC tokens and earn interest on them. As the tokens have only recently been added they can’t yet be used as collateral to borrow against.

Compound’s move reportedly came over “overwhelming” user demand after it asked users whether or not it should list the WBTC token. Wrapped Bitcoins are an ERC-20 token pegged 1:1 with bitcoin that was launched in January of this year.

According to its whitepaper users themselves can’t wrap their own BTC, and instead there’s a complex supply chain that sees big cryptocurrency names deliver the tokens. It adds that third parties are set to conduct quarterly audits of all WBTC to ensure a corresponding amount of BTC is stored by custodians.

Robert Leshner, Compound’s CEO, noted the token pegged to bitcoin represents a first step to integrate the flagship cryptocurrency into the Ethereum ecosystem, but that there are concerns regarding the token’s centralization, as the BTC used to back WBTC is custodied at services like BitGo.

Leshner further added that Compound didn’t launch WBTC until its ecosystem matured. The decentralized finance protocol uses for wrapped bitcoin the same interest rate model it uses on ETH, BAT; ZRX, and REP.

Currently users can lend and borrow Brave’s BAT, DAI, ZRX, USDC, WBTC, REP, and ETH through Compound’s app. Supplying annual percentage rates range between 0.02% for ETH to 12.6% for DAI. These rates change according to specific factors.

The Coronavirus Outbreak Is Delaying China’s Digital Currency Research

China’s research into the launch of its own digital currency has reportedly been delayed over the coronavirus outbreak, which according to recent data has infected over 81,000 people worldwide and claimed the lives of 2,765.

According to the Global Times, an anonymous source close to the matter has detailed that the outbreak forced several government institutions to slow down. The source was quoted as saying:

The coronavirus outbreak has led to postponed work resumption in government institutions, including the People's Bank of China (PBC). Policymakers and research staff involved in the DCEP project are no exception, which weighs on the development process.

Commenting on the case the CEO of a Shenzhen-based blockchain firm involved in the launch of the digital currency, Shentu Qingchun, noted the People’s Bank of China, the country’s central bank, was expected to make an important announcement during Q1 of this year.

Qingchun added, however, there’s only a month left and as such “chances that the announcement could be made on time are slim.” The currency, called Digital Currency Electronic Payment (DCEP), is still being developed and officials are discussing scenarios in which it could circulate as cash.

The source noted that the digital currency could still be launched on time as the central bank has “abundant talent” that can help it deal with the delay in research. Per Shentu, since the DCEP is a digital currency it would help reduce hand-to-hand contact among individuals, which has helped the coronavirus outbreak spread. As such, policymakers could give the DCEP more attention.

The Global Times’ source added that research into the DCEP has “achieved fruitful results” and that it’s close to an end. The central bank’s research institute, per the report, has applied for 65 patents involving digital currencies, while its institute of printing science and technology has applied for 22.

Featured image by Floriane Vita on Unsplash.