The Goldman Sachs backed cryptocurrency business BitGo is partnering with Kyber Network and Republic Protocol to develop solution for a long standing issue - bringing Bitcoin and Ethereum together by wrapping Bitcoin in a fungible Ethereum ERC20 token.
As expected in times when companies are fighting for market share in the emerging business of cryptoasset custody, the solution will not be a disruptive technical innovation: BitGo will act as the custodian of BTC that will be represented by the issuance of ERC20 tokens.
WBTC (Wrapped Bitcoin, not to be confused with the WBTC Bitcoin fork from January 2018) will launch as a fully-backed Bitcoin ERC20 token.
The most important advantage of this solution as opposed to fiat or commodity-backed token is the inherent transparency: all WBTC issued will be verifiable on-chain and the WBTC system will provide proof-of-reserve dashboard, showing that every Bitcoin stored by the custodian corresponds to the total outstanding WBTC.
The release of WBTC is planned for January 2019, however a Wrapped Bitcoin contract on Ethereum blockchain already exists on address 0x8577a006fe5d5b8a45b8acb90ede208858688876 and has been active since mid September. Kyber Network and Republic Protocol said they were planning to pre-mint WBTC tokens from their own Bitcoin inventory in order to provide initial liquidity.
Wrapped Bitcoin will be widely accepted by dApps and DExes
The initiative is ment to bridge Bitcoin liquidity and the decentralized ecosystem on Ethereum, enhancing all decentralized applications. WBTC will allow any project to include WBTC in their platform without restrictions.
Thanks to the community reach of the organizations developing WBTC, prominent blockchain projects have pledged to support the adoption of WBTC.
These include MakerDAO, Dharma, Airswap, IDEX, Compound, DDEX, Hydro Protocol, Set Protocol or Prycto.
Blockchain technnology companies partnering to launch WBTC
- BitGo is world’s largest processor of BTC transactions and institutional-grade cryptocurrency investment services provider with focus on security, compliance, and custody.
- Kyber Network is an on-chain liquidity protocol for decentralized token swaps between all parties in the Kyber ecosystem.
- Republic Protocol is a decentralized dark pool exchange protocol designed for large volume trading of digital assets.
For more information about how to get involved, please visit wbtc.network.
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