ERC-20 Token Pegged To Bitcoin Is Launched
Through a partnership, Kyber Network liquidity protocol and blockchain security firm BitGo has launched Wrapped Bitcoin (WBTC), a crypto token built using Ethereum blockchain and pegged to Bitcoin.
Back in October 2018, BitGo revealed its plan to develop a cryptotoken pegged to Bitcoin on a 1:1 basis. At that time, BitGo also issued a statement saying that Wrapped Bitcoin will offer users with a “wide variety of new decentralized use cases including on decentralized exchanges (DEXs), as collateral for stablecoins or lending, for payments and flexible smart contracts within the Ethereum ecosystem.”
WBTC, being an ERC-20 token, can be used only on the Ethereum platform. These tokens act as a template using which developers will be able to develop a new crypto token, thereby eliminating the need to build a new crypto from the scratch.
Wrapped Bitcoin will supposedly permit creation of new applications and real world use cases for Bitcoin on the Ethereum network. WBTC network’s press release states that “By bringing Bitcoin’s liquidity to Ethereum, WBTC also makes it possible for traders to use Bitcoin value for token trades on decentralized exchanges.”
Furthermore, WBTC smart contracts have already gone through auditing by third-party firms. Notably, users will be able to verify the proof of reserve (Bitcoin) based on 1:1 ratio on the chain.
WBTC is presently trading at $3,504.98, a small premium over the price of Bitcoin (BTC), which is trading at $3,501.28.
Last September, BitGo turned out to be a certified cryptocurrency custodian through the takeover of a state trust company charter in South Dakota. The firm has also become a subject of regulatory supervision in accordance with anti-money laundering (AML) policies and Know Your Customer (KYC).