The Kraken crypto exchange has introduced its own token called Kraken Wrapped Bitcoin (kBTC).
According to the press release on Oct. 17, each kBTC is backed 1:1 by Bitcoin held at Kraken Financial, a Wyoming-chartered financial institution. This means that for every kBTC issued, there is one real Bitcoin stored by Kraken.
The token is built on the ERC-20 standard and designed to work on both the Ethereum network and OP Mainnet (formerly known as Optimism).
Kraken explained in its press release, “With kBTC, we’re bringing the power of Bitcoin to new networks, underpinned by the trust and security expertise Kraken has established over the last decade”
Moreover, the wrapped Bitcoin will allow users to use their Bitcoin in decentralized apps (DApps) that normally don’t support Bitcoin.
Additionally, Kraken has taken steps to ensure transparency by making on-chain data available for public inspection. Users can check the kBTC reserves by viewing the custody address and smart contracts for both Ethereum and OP Mainnet.
Kraken also mentioned that it hired Trail of Bits, a security firm, to audit the smart contract, and the token successfully passed all tests.
Wrapped tokens like kBTC allow assets to be used across multiple blockchains, improving interoperability in decentralized finance (DeFi). For example, kBTC can be used on Ethereum to trade, lend, or borrow Bitcoin on various DeFi platforms.
At the time of launch, Kraken won’t support any spot markets for kBTC, but users will be able to redeem the token for actual Bitcoin at any time.
kBTC will be integrated into major DeFi platforms such as Yearn, Curve, Paraswap, and others. Additionally, Kraken set the minimum deposit for kBTC at 0.00026 BTC, which is approximately $15 at current prices.
Also Read: BlackRock Buys $391.8M Bitcoin Boosts Holdings to $25 Billion
