$zBTC Supply Up 153% in 7D as Solana BitcoinFi Evolves

Bitcoin is undoubtedly the greatest source of liquidity in the blockchain industry. However, its lack of composability makes it difficult to leverage permissionlessly in a DeFi ecosystem.

Emerging Solana DeFi apps like Zeus Network and Fragmetric are changing this narrative. $zBTC supply has exploded since Fragmetric introduced $fragBTC restaking at Solana Crossroads, reinvigorating Bitcoin’s role in the Solana ecosystem.

But despite growing demand for $zBTC, incentivized emissions are running out. Will $zBTC remain relevant as staking rewards diminish? 

Demand for Bitcoin on Solana Soars

Pegged to the value of Bitcoin, Zeus Network’s permissionless $zBTC has enjoyed a significant uptick in adoption. Following its integration with Fragmetric, a restaking protocol, $zBTC’s supply has surged by 153%, rising from 93 to 236 in the past 7 days and bringing $zBTC’s market cap to $23.3M.

Much of $zBTC’s recent growth comes from singular transactions, with one user minting 20 $zBTC tokens worth just under $2M.

While $zBTC’s impressive growth indicates increasing demand for permissionless Bitcoin-pegged assets on Solana, $zBTC still trails behind centralized alternatives. $WBTC and Coinbase’s $cbBTC dominate market share, with $WBTC constituting over 52% of the network’s BTC-pegged assets.

As of May 5, $WBTC has finally been deployed natively on Solana, further illustrating Bitcoin’s expansion within the network’s DeFi ecosystem. 

Previously, the industry’s largest BTC-pegged asset was only available on Solana via Wormhole integration.

Fragmetric Captures 34% of $zBTC Supply - Will it Last?

$zBTC’s meteoric supply growth coincides with the launch of Fragmetric’s $fragBTC product. Developed using Fragmetric’s FRAG-22 asset standard, $fragBTC accrues BTC-denominated yield through delta-neutral strategies. Since launch, Fragmetric has amassed over 32% of all circulating $zBTC in its staking contract.

However, the longevity of Fragmetric’s $zBTC deposits is uncertain. As part of its launch campaign, Fragmetric is offering ~14% APY paid in incentivized $ZEUS token rewards. 

According to Fragmetric’s UI, $fragSOL is still not generating any meaningful native yield outside of $ZEUS emissions. With only 6 days remaining, it is unclear whether Fragmetric’s delta-neutral yield strategy will begin generating sufficient yield to retain depositors’ capital.

Zeus Network Teases $btcSOL

Perhaps inspired by $fragBTC, Zeus Network appears to be working towards a $SOL-denominated restaking coin that automatically converts staking rewards into $BTC. 

SolanaFloor engaged Zeus Network for clarity on the team’s involvement in the developing product. According to a Zeus Network representative, $btcSOL is not a proprietary product, but will receive ongoing support and guidance from the Zeus team to guarantee quality assurance.

Based on its official website, $btcSOL is expected to launch in ~30 days.

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