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Cryptocurrency News Articles
Kraken Launches kBTC, a Wrapped Bitcoin Variant, to Enable BTC Use in Ethereum and OP Mainnet dApps
Oct 18, 2024 at 06:57 pm
Real Bitcoin, which is kept by Kraken Financial, a unique depository organization with headquarters in Wyoming, fully backs each kBTC token at a 1:1 ratio.
Kraken, a well-known cryptocurrency exchange, has introduced kBTC, a new wrapped Bitcoin variant. This token is designed to enable the use of Bitcoin in dApps on the Ethereum and OP Mainnet platforms.
Each kBTC token is fully backed 1:1 by real Bitcoin, which is custodied by Kraken Financial, a special depository organization headquartered in Wyoming.
In DeFi, wrapped Bitcoin tokens like kBTC make Bitcoin more versatile and usable. Normally, Bitcoin is incompatible with Ethereum and other networks like it.
To solve this problem, wrapped Bitcoin allows Bitcoin to function on these platforms as an ERC-20 token, a common type of Ethereum token. With kBTC, users can still hold an asset that moves with the value of Bitcoin while using DeFi capabilities like lending, borrowing, and trading.
Kraken’s introduction of kBTC follows the launch of a wrapped Bitcoin token, cbBTC, by Coinbase, another major cryptocurrency exchange.
This new competition in the wrapped Bitcoin space is emerging as a threat to the current leader in tokenized Bitcoin, WBTC, which has a market capitalization of around $10 billion.
In a bid to foster trust and transparency, Kraken has opened up an address of its kBTC reserves to the public. This allows users to verify that every kBTC token is backed by real Bitcoin.
At the moment, there are 100 BTC in Kraken’s custody wallet, out of which 20 kBTC is deployed on the OP Mainnet and 80 kBTC is released on Ethereum. Moreover, Kraken reveals plans to expand kBTC interoperability to more networks, including those outside the EVM ecosystem.
Introducing $kBTC – an ERC-20 token fully backed 1:1 by Bitcoin, held securely by Kraken and always verifiable onchain.
More possibilities.
More functionality.
More transparency.
Let’s take a closer look ⤵️ pic.twitter.com/VammHbyJKm
The benefit of kBTC is its compatibility with other networks, which makes it easier for developers to create dApps that utilize the value of Bitcoin.
To offer kBTC at launch, Kraken collaborated with several platforms, including deBridge, Definitive, Gauntlet, ParaSwap, and Yearn. These collaborations are set to expand the application and utility of kBTC in the DeFi market.
Kraken emphasizes that kBTC is not just another wrapped Bitcoin product but is built on their thirteen years of experience in the cryptocurrency space.
The kBTC smart contract has been audited by Trail of Bits, a renowned Web3 security company, highlighting the importance of security.
According to Kraken, the introduction of kBTC is part of their broader mission to accelerate the adoption of DeFi.
By making Bitcoin compatible with more networks, Kraken aims to onboard more users into the DeFi ecosystem and enable their decentralized use of Bitcoin.
At launch, users will be able to redeem their kBTC for the underlying Bitcoin, although there are no plans to enable spot markets for kBTC.
With Kraken’s kBTC, owners of Bitcoin now have a new option to interact with decentralized applications while enjoying the security and transparency that Kraken is known for.
Backed by real Bitcoin, partnerships with leading DeFi platforms, and future expansion plans, kBTC hopes to become a valuable asset in the growing landscape of decentralized finance.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
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