BitGo, a Goldman Sachs supported custody firm, has announced it will launch “Wrapped Bitcoin” – a new Bitcoin-backed ERC-20 token known as WBTC that will run on the Ethereum blockchain.
Kyber Network and Republic Protocol have partnered with BitGo to develop the WBTC token which leverage a 1-to-1 mapping of BTC to WBTC on the Ethereum netwowrk.
Today, in partnership with @KyberNetwork, @republicorg, and our community of launch partners, we’re introducing Wrapped Bitcoin, the first ERC20 token backed 1:1 with #BTC – with full proof of reserve. CTO @bencxr explains: https://t.co/dlpQAzigQq #wbtc $wbtc #wrappedBitcoin pic.twitter.com/bgqxrFJ7Eh
— BitGo (@BitGo) October 26, 2018
BTC LIQUIDITY WITH ETH SMART CONTRACTS
Loi Luu, the CEO of Kyber Network, suggested that “This initiative will be bringing together the liquidity of Bitcoin and the extensive smart contract developer ecosystem of Ethereum.”
It is envisaged that such a product would aid not only loans and payments but also decentralised exchanges and other financial protocols by being able to “…use Bitcoin seamlessly, and creating Bitcoin trading pairs [with Ethereum tokens] which have been impossible until now.”
The hybrid token appears to have been a hit with numerous projects as the press release states the likes of MakerDAO, Dharma, Airswap, IDEX and others have committed to supporting the adoption of the token.
While BitGo will provide the custodial services when the token goes live at the beginning of next year, it will be Kyber Network and Republic Protocol who will pre-mint the WBTC tokens backed by their own store of BTC to provide initial liquidity.
BitGo, who are headquartered in California but with offices in London, Singapore and Tokyo, received significant investment from Goldman Sachs and billionaire investor Mike Novogratz earlier this month and reportedly has over $2 billion of assets in wallet.