Bitcoin-Backed Stablecoin Reportedly Launched on Ethereum Blockchain

According to reports a new digital token backed by Bitcoin (BTC) one on one is going live on the Ethereum (ETH) Blockchain. The new Bitcoin-backed stablecoin is known as Warpped BTC (WBTC).

Bitcoin (BTC) Price Today – BTC / USD

NamePrice24H %
bitcoin
Bitcoin(BTC)
$0.00-0.15%

As per the report, “Wrapped BTC” (WBTC) was officially unveiled as an ERC-20 token this past Wednesday evening. The plans for the project was initially revealed in October 2018 as a collaborative effort between decentralized exchanges Kyber Network, Republic Protocol, and cryptocurrency custody company BitGo.

According to the project’s website, the main purpose of the WBTC stablecoin is to bring better liquidity to the Ethereum (ETH) ecosystem including financial applications and decentralized exchanges.”

Bitcoin (BTC) is the Most Liquid and Stable of All Digital Assets

At the time of the launch, the CTO of BitGo Benedict Chan described the WBTC token as possessing “the stability of Bitcoin (BTC) and flexibility of Ethereum (ETH).” They likened the new cryptocurrency to traditional bank notes (does kinds formally redeemable for gold). Although more volatile when compared to the USD, Bitcoin (BTC) remains the most stable and liquid of all cryptocurrencies with the biggest market cap, Chan noted.

The new Bitcoin-backed stablecoin has now been listed on the crypto market data exchange CoinMarketCap. As of the early part of Wednesday evening, the new token was reportedly up 72.4214 WBTC as per volume on the Ethereum (ETH) network, which is slightly over-collateralized with more than 72.4216 BTC (equivalent to $250,000) locked up in custody on the Bitcoin (BTC) blockchain.

Leveraging a tech called “atomic swaps” in a bid to facilitate cross-chain crypto trades, users on the Ethereum (ETH) Blockchain can request the WBTC tokens from certified merchants. They can achieve this by undergoing the necessary anti-money-laundering stipulations (AML) and know-your-customer (KYC) identification procedures.

Traditionally playing a primary role in the liquidation and exchange of new WBTC coins or tokens, merchants are described in the tech’s white paper as “the party or institution to which wrapped digital tokens are going to be minted to or burnt from.”

According to the team behind the Bitcoin-backed WBTC digital asset, there are presently eight different merchants to facilitate the conversion of WBTC and BTC. These merchants include AirSwap, GOPAX, Kyber Network, Prycto, Dharma, ETHfinex, Ren and Set Protocol.

WBTC Will be Traded on Exchanges

In addition to the above, a number of crypto exchanges have already started to procure part of the initial inventory of the WBTC stablecoin and will have the capability to support its live directly on their respective networks. This is according to the WBTC press release following its launch.

Finally, several financially-focussed dApps (decentralized applications) on the Ethereum Blockchain including bZx, dYdX, and Compound will allow the “immediate usage” of the new crypto token.

Hence, despite the concerns that have been expressed by the Ethereum’s (ETH) creator Vitalik Buterin, on Twitter regarding the centralized nature of the new WBTC token swap model, the press release discloses:

The fundamental design or foundation of the WBTC stablecoin and the continuous commitment of all members to openness will create the essential building blocks or framework for a more transparent process and governance structure. WBTC will then remain a firmly community-oriented and driven initiative.”

Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.