The amount of bitcoin (BTC tokenized on the Ethereum network via the wrapped bitcoin (WBTC) protocol has now surpassed $1 billion, after growing by over 860% in the last 90 days, from little over $200 million.

The milestone comes weeks after the total value of all the bitcoin tokenized on the ETH network via various protocols surpassed $1 billion. There now over $1.5 billion worth of bitcoin tokenized on the second-largest cryptocurrency’s network, with WBTC making up the majority of the funds.

The decentralized finance (DeFi) space has been a major source of demand for WBTC tokens, as traders and yield farmers can use a tokenized version of the flagship cryptocurrency to earn interest on their BTC holdings, while maximizing their earnings thanks to governance token rewards.

DeFiPulse data shows there are now over $10 billion locked in the DeFi space, meaning WBTC makes up roughly 10% of the total value locked in it. WBTC is an ERC-20 token pegged to the value of BTC. The existence of tokenized BTC means it’s possible to use Ethereum smart contracts with BTC.

There are other Bitcoin tokenization protocols out there other than WBTC. Ren’s (REN) VOM has, for example, locked up over $300 million worth of BTC since it was launched, while the A16z-backed Keep Network has its tBTC protocol, with a market cap of about $4.5 million.

tBTC, it’s worth noting, has been facing problems as its signers face liquidations rather often.

While bitcoin holders tokenized their BTC holdings to earn interest on the Ethereum network’s DeFi protocols, it’s worth noting there are several risks associated with the strategy. On several occasions DeFi protocols have been exploited, and as CryptoGlobe reported the price of most DeFi-related tokens has been plummeting over the last few weeks.

To earn interest on their bitcoin holdings, other investors use centralized trading platforms, which offer programs for various cryptoassets. Popular spot and derivatives exchange OKEx, for example, lets users earn interest not only on BTC, but on various other cryptoassets.

OKEx has also interfaced various popular DeFi protocols onto its platform – including Uniswap and Compound – to let users farm yield without leaving the centralized trading platform. The move helps reduce transaction fees users pay, thus maximizing returns.

It’s worth noting that a wrapped bitcoin and a wrapped ether token may soon be launched on the TRON blockchain. As reported, TRON has partnered with cryptocurrency services provider BitGo to create both tokens in TRC20 format, in a bid to bolster its own DeFi ecosystem.

Featured image via Pixabay.