Goldman Sachs-backed Bitcoin security firm, BitGo recently unveiled Wrapped Bitcoin (WBTC) – a Bitcoin ERC20 token. The new token is a collaboration between the firm, Republic Protocol, and Kyber Network.
Wrapped Bitcoin (WBTC)
According to a press release on Business Wire, published on Friday (October 26, 2018), BitGo along with other partners is launching WBTC – a fully-backed ERC20 Bitcoin token. Each WBTC token is backed by 1 BTC.
WBTC will enable users to trade BTC on decentralized exchanges, as well as facilitating various transactions on the Ethereum Network. Also, the administration of the entire WBTC ecosystem will be via a Decentralized Autonomous Organization (DAO).
Commenting on the initiative, Kyber Network CEO, Loi Luu said:
This initiative will be bringing together the liquidity of Bitcoin and the extensive smart contract developer ecosystem of Ethereum. Applications on Ethereum such as decentralized exchanges and financial protocols will all be able to use Bitcoin seamlessly, creating bitcoin trading pairs which have been impossible until now. At the same time, the usage of Bitcoin will be expanded by having more decentralized use cases, such as exchange, loans, token payments.
According to Benedict Chan, the BitGo CTO, the company will provide custodial service for the WBTC tokens. In a blog post published on the BitGo website also on Friday, Chan said:
Every Bitcoin will be accounted for on a dashboard displaying addresses and balances, and users will be able to verify on the blockchain each Bitcoin that is held in custody. This can be done by comparing the exact number of Bitcoin stored with the total supply of WBTC in circulation via a blockchain explorer like Etherscan.
January 2019 Launch
To get things started, both Kyber Network and Republic Protocol will “pre-mint” WBTC tokens. The pair’s full BTC purse will back these pre-minted tokens. This move is to provide initial liquidity for WBTC. It is also to ensure that the new tokens are available for atomic swap.
According to the CEO of Republic Protocol, Taiyang Zhang, atomic swaps increases the possibility of greater adoption of WBTC tokens since traders can easily transfer between BTC and WBTC and vice versa. Presently, the plan is to have the token launch happen at the start of the year.
For BitGo, the news is yet another massive development for the Bitcoin security outfit. Recently, it received a $15 million investment from Galaxy Digital and Goldman Sachs.
Will Wrapped Bitcoin (WBTC) deliver on its promise of BTC liquidity and smart contract capability of the Ethereum network? Let us know your thoughts in the comment section below.
Image courtesy of BitGo and ShutterStock