Kraken launches its wrapped Bitcoin alternative kBTC

Kraken introduces its wrapped Bitcoin alternative kBTC

2024-10-18 by Ndaman Olayinka 5 minutes read
Kraken introduces its wrapped Bitcoin alternative kBTC

In the face of a growing number of WBTC alternatives, cryptocurrency exchange Kraken has launched its own wrap version of Bitcoin (BTC) on Ethereum and OP Mainnet. 

Introducing Kraken Wrapped Bitcoin (kBTC) 

According to a statement by the exchange, Kraken Wrapped Bitcoin (kBTC) is an ERC-20 token that is fully backed and compatible with other networks. 

kBTC token is safely stored in Kraken's custody and fully backed 1:1 by an equivalent quantity of Bitcoin. Customers can examine Kraken onchain reserves at any time to confirm this for themselves. Kraken Financial, a Wyoming-chartered SPDI (Special Purpose Depository Institution), holds an equivalent quantity of Bitcoin, which serves as a 1:1 backing for each kBTC token. 

Additionally, Kraken revealed an onchain address for the product's reserves, allowing users to verify kBTC's backing. The custody address displays a current balance of 100 BTC ($6.7 million), which is equivalent to a supply of 80 kBTC on the Ethereum network and 20 kBTC on the OP Mainnet. 

kBTC's compatibility with networks such as Ethereum and OP Mainnet (formerly known as Optimism) allows it to be utilized in decentralized applications (dApps). 

Kraken gave an explanation for the company's decision to introduce kBTC, stating that it has always supported the revolutionary potential of Bitcoin, the first and most resilient digital asset ever created. With kBTC, you're getting more than just a wrapped token that enables you to explore DeFi further; you're also getting access to Kraken's more than 13 years of industry-leading custody infrastructure. This guarantees that kBTC is always accessible, securely stored, and backed 1:1 by Bitcoin when you use it. 

Benefits of kBTC 

With plans to expand compatibility to other networks, including non-EVM ecosystems, kBTC revolutionizes the usefulness of Bitcoin by enabling its smooth integration into Ethereum, the OP Mainnet, and other networks. 

kBTC offers a safe, completely backed solution that unlocks Bitcoin's unmatched value and potential across a wide range of ecosystems, whether you're an investor looking to expand your onchain portfolio or a developer looking to improve your dApps with Bitcoin. Definitive, Gauntlet, ParaSwap, Yearn, and deBridge are Kraken Day 1 launch partners. 

kBTC is based on security and transparency 

An external security auditing firm called Trail of Bits thoroughly examined the kBTC ERC-20 smart contract. In order to find and fix any possible security flaws, this audit, which kBTC passed, included a thorough analysis of Kraken codebase and client architecture. 

Kraken's commitment to Bitcoin's future 

Kraken is extending the reach of Bitcoin to new networks with kBTC, supported by the security expertise and trust that the firm has built over the past ten years. Kraken believes that kBTC strengthens Bitcoin's standing as the center of cryptocurrency, enables developers to experiment with new applications for Bitcoin, and advances the ecosystem as a whole. 

In a press release, Kraken said that by acquiring BCM, it has significantly strengthened its position in the Netherlands and improved its company with a registered Virtual Asset Service Provider (VASP) in Poland and France.

Increasing competition for wrapped Bitcoin 

Coinbase, a rival cryptocurrency exchange, unveiled cbBTC on Ethereum and Base, a wrapped bitcoin alternative, just one month prior to Kraken's kBTC launch. Additionally, Coinbase said that it is working to add more chains to its list of native cbBTC support. 

BitGo also announced in August a partnership to manage WBTC custody with BiT Global, a Hong Kong-based company. BitGo will provide "multi-jurisdictional and multi-institutional custody" for the WBTC business as a minority owner in a new joint venture with BiT Global, the custody firm announced. 

Disclaimer

This information should not be considered financial advice by any means. Please do your own research before making any investment decisions. The views in the articles are personal opinions only. Whale Insider is not responsible for any financial losses incurred.