The joint effort by Kyber Network (KNC), Republic Protocol (REN) and BitGO seems to be working well as the teams together announced the launch WBTC – or Wrapped Bitcoin. WBTC is a proposed ERC-20 token which is backed up by ‘physical’ reserves of BTC and will be expected to remain tethered to Bitcoin’s value.
Wrapped Bitcoin: the power of Bitcoin with the flexibility of an ERC20 token
WBTC is a community-focused initiative and is the culmination of a long-standing joint effort relationship between BitGo, Kyber Network, and Republic Protocol. WBTC (Wrapped Bitcoin) will launch as a fully backed Bitcoin ERC20 token on Ethereum in January 2019. The initiative will bridge Bitcoin liquidity and the decentralized ecosystem on Ethereum, enhancing all decentralized applications. WBTC will allow the Ethereum network to be leveraged to enable new applications and use cases for Bitcoin.
Prominent decentralized exchanges and financial projects, including MakerDAO, Dharma, Airswap, IDEX, Compound, DDEX, Hydro Protocol, Set Protocol, and Prycto have all committed to supporting the adoption of WBTC and will participate as launch members.
Loi Luu, Co-founder, and CEO of Kyber Network
“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.”
WBTC will allow any project to include WBTC in their platform without restrictions, while users can easily purchase WBTC tokens on any supported swap service or exchange. The effort will be community driven from launch, with governance dictated through a Decentralized Autonomous Organization (DAO) comprised of reputable projects in the cryptocurrency space.
DAO members will publicly audit the WBTC tokens to make sure that the balances in the custodian wallet and the smart contract match. In addition, they will vote and decide on any proposed improvements. The addition of any new minters, custodians, and DAO members as well as the removal of the existing members will happen via a transparent voting process in the DAO.
At launch, Kyber and Republic Protocol will pre-mint WBTC tokens from their own Bitcoin inventory to provide initial liquidity and make WBTC available for atomic swaps with users.
Taiyang Zhang, CEO Republic Protocol was quoted saying
“The addition of atomic swap technology to the WBTC initiative will allow users to deposit and withdraw BTC/WBTC securely and with confidence, which will assist in enabling WBTC adoption to reach the masses.”
This initiative, including the initial minters and DAO, is expected to go live in January 2019. In advance of the launch, the specifications will be made known on GitHub/Gitter for all members of the cryptocurrency community to discuss and propose improvements on both the token and the governance model.
The project seems promising as the strength of bitcoin and ERC20 token could bring superlative result and add more power to cryptocurrencies. It would be exciting to see how the product phases out after it is launched.
Will Wrapped Bitcoin deliver in line with how it is anticipated to be? DO let us know your views on the same
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Divya Bhatia from Computer science background is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Reach out to her at [email protected]