BitGo-backed Wrapped Bitcoin (WBTC) goes live on Ethereum mainnet
Well, in an interesting development on Wednesday, people behind the Wrapped Bitcoin (WBTC) project launched the ERC20-compliant version of the Bitcoin (BTC) on the Ethereum (ETH) mainnet. With this latest development, Bitcoin has been turned into an Ethereum token. The leader of the pack, Bitcoin has now become an Ethereum Dapp, according to a report by Trustnodes.
Wrapped Bitcoin is nothing, but an ERC-20 token backed 1:1 with Bitcoin (BTC). In simple terms, it is a stablecoin like Tether but rather than being backed by USD, it is backed by BTC.
The Wrapped Bitcoin project came to public notice in October last year when BitGo, Kyber Network (KNC), Republic Protocol (REN) unveiled the project. The main reason behind the launch of this project was to add much needed liquidity to the Ethereum network.
As per the report, “Eight initial merchants will be facilitating conversion between WBTC and BTC. The eight merchants are AirSwap, Dharma, ETHfinex, GOPAX, Kyber Network, Prycto, Ren, and Set Protocol.”
This new token will work very similar to any fiat centralization token—you give BTC to one of the eight merchants and they will give you WBTC in return.
The best part of the project is that users can now use the entire Ethereum ecosystem. “WBTC standardizes Bitcoin to the ERC20 format, so DApps such as Compound, Dharma, dYdx, Gnosis, Maker, Set protocol and more can leverage Bitcoin for decentralized lending, margin trading and derivative markets,” the project said in a press release.
At the time of writing, the new token currently has 65 BTC locked into its smart contract. This BitGo-backed venture holds BTC in cold storage.
The project states that, “The proof of reserve is on-chain, which shows the exact 1:1 between minted WBTC tokens and BTC stored by the custodians.”
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