Ethereum (ETH) Platform is Hosting a Stable Coin Backed by Bitcoin (BTC)
Dubbed “Wrapped Bitcoin” with thicker (WBTC), the newly launched WBTC token is said to represent a stable coin backed by the value of the largest and the original cryptocurrency in the crypto market – Bitcoin (BTC).
Described on the official website of the new crypto project, Wrapped Bitcoin is presented as the first token-backed ERC20 type of digital asset, coming with the flexibility of ERC20 tokens and the power of Bitcoin.
The team representatives claim that the newly launched token is completely transparent, while offering 1:1 back ratio between WBTC and BTC, much like it is the case with Tether (USDT) and the US dollar.
Bitcoin-backed Token Now Available on Ethereum Platform
As Ethereum platform is still waiting for the Constantinople hard fork to take place as rescheduled for February, ETH network got another community member in form of a newly launched ERC20 type token named Wrapped Bitcoin (WBTC).
The team behind WBTC went on to explain on their official website that Wrapped Bitcoin token makes sense because it provides the end-user with the ability to integrate Bitcoin with smart contracts, also providing additional liquidity to Ethereum platform and decentralized exchange markets.
At the same time, team representatives describe the new BTC-backed token as the “first token that makes Bitcoin compatible with Ethereum platform”.
Furthermore, what appears to be the key benefit behind the WBTC project, as stated on the official website, is the fact that decentralized exchanges can take advantage of the increased liquidity that comes with Bitcoin but wouldn’t be normally available on Ethereum network.
As the team stated further in their presentation of the WBTC token, since Ethereum network is able to process more transactions per second in oppose to Bitcoin, BTC users are entitled to choose WBTC instead of traditionally used Bitcoin while acquiring the value of BTC.
Bitcoin Has the Greatest Stability and Liquidity in the Crypto Market, Claims BitGo CTO
WBTC is further described as 100% transparent and fully in control of the WBTC users, noting that the project was jointly initiated by BitGo, Kyber and Ren.
BitGo CTO, Benedict Chan, stated on the occasion of presenting WBTC that the teams have chosen their token to be backed by the value of Bitcoin given the fact that Bitcoin makes up for the most stable currency in the cryptocurrency market, adding that BTC also has the greatest level of liquidity when compared to its crypto peers and traded against the US dollar.
All interested users and traders are said to be able to acquire WBTC after going through AML and KYC identification process, which should be conducted by certified merchants.
The teams already announced 8 certified merchants who will be representing mediators for converting BTC to WBTC and vice versa, naming AirSwap, Ren, Kyber, GOPAX, Dharma, Set Protocol and ETHfinex as the official WBTC merchants at the present.
In the meanwhile, some interested crypto enthusiasts are sharing their concerns regarding WBTC and its type of management and governance, hinting that the project is centralized as users need to trust their BTC to a third party presented in merchants.
Vitalik Buterin, the founder of Ethereum project, also expressed his concerns in one of his latest tweets published on January 30th, stating that he hopes that WBTC would be able to decentralize over time.