As a seasoned researcher with years of experience in the ever-evolving world of cryptocurrencies, I find the recent move by Kraken to launch their wrapped Bitcoin (kBTC) on the Ethereum network and Optimism intriguing. This is not just another token, but a fully backed, verifiable, and cross-chain compatible ERC-20 token that promises to revolutionize the decentralized financial (DeFi) ecosystem.
The prominent U.S.-based Web3 company, Kraken Cryptocurrency Exchange, has unveiled a wrapped variant of Bitcoin (BTC) on the Ethereum network. This new product from Kraken is called Kraken Wrapped Bitcoin (kBTC). Notably, kBTC remains fully collateralized and verifiable on the blockchain at all times. Additionally, users can effortlessly convert their ERC-20 BTC version into actual Bitcoin assets whenever they desire.
On the Ethereum network’s Optimism scaling solution, which is renowned for its efficiency, the interoperable ERC-20 token known as kBTC will also be accessible.
The cryptocurrency platform plans to guarantee the safety of the kBTC by keeping them in their secure custody service and using Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution (SPDI), to safeguard the Bitcoins employed for wrapping the kBTC. In simpler terms, they aim to ensure the security of the Bitcoin used in creating kBTC by storing it securely and using Kraken Financial’s services.
Over the course of time, kBTC can adapt effortlessly across multiple decentralized finance (DeFi) environments.
When you utilize kBTC, you’re not just obtaining a digital token for deeper engagement in DeFi; instead, you’re tapping into the robust 13-year custodial services of Kraken. This means that your kBTC is always fully collateralized by Bitcoin, safely stored, and readily available for use,” Kraken emphasizes.
According to current figures from our analysis, the overall value of kBTC stands at approximately $6.7 million. Around 80% of this amount can be found on the Ethereum network, whereas the rest is wrapped and located on the Optimism network.
Kraken Remains Committed to the Long-Term Success of Bitcoin
Over the last few years, Kraken, a prominent cryptocurrency exchange, has significantly facilitated the mainstream acceptance of Bitcoin in a regulated setting. With over 760 different cryptocurrency pairings available for trade, Kraken’s daily net trading volume consistently exceeds $630 million. In the recent quarter alone, their reported cumulative trading volume reached approximately $207 billion.
Since its establishment in 2011, Kraken has drawn over 10 million registered users, playing a significant role in facilitating the mainstream acceptance of cryptocurrencies.
Instead, Kraken is setting out on a mission to boost Bitcoin’s functionality within the web3 environment. The kBTC will be instrumental in managing liquidity for Bitcoin and various other digital currencies.
On the other hand, certain professionals in the field have voiced apprehensions regarding the use of Bitcoin’s wrapped versions due to security issues. Furthermore, these wrapped Bitcoin versions exhibit a high degree of centralization, which contradicts the original aim of Satoshi Nakamoto to surpass traditional financial systems.
Market Impact
The Bitcoin network is aggressively moving into the Decentralized Finance (DeFi) sector to match the pace set by the altcoin market. Currently, the combined value secured in DeFi platforms like SolvBTC LST, AILayer farm, and Lorenzo Protocol, along with others, amounts to approximately $1.3 billion within the Bitcoin network.
The expansion of the web3 sector within the Bitcoin network has substantially boosted its inherent worth, pushing it back above the vital support level at approximately $67k.
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2024-10-17 20:09