San Francisco-based Kraken exchange, one of the largest digital currency platforms in the United States, has now added its Ethereum-based WBTC to the popular Wrapped Bitcoin market. The company followed the example of competitor Coinbase, which announced a similar event one month ago, resulting in increasing rivalry in the wrapped Bitcoin market.
In a blog post released Thursday, Kraken announced that kBTC is built on the Ethereum blockchain and is “fully backed 1:1 by an equivalent amount of bitcoin” in Kraken Financial, the company’s Wyoming-chartered depository institution. The company emphasized that it will be transparent and that users will always be able to check reserves on the blockchain.
That is why we ensure clients understand their assets are fully secured and insured.” Our ability to inspect our reserves gives that level of trust, and Kraken wants to capitalize on this as competition tightens.
Kraken Expands kBTC Utility and Secures It with Trail of Bits
Wrapped Bitcoin (WBTC) means that the users of the Ethereum network can incorporate Bitcoin into the DeFi apps, accessing the opportunities associated with Bitcoin’s liquidity and worth. Like Kraken’s product kBTC, kBTC will operate on Ethereum and in Ethereum-based decentralized applications (dApps) compatible with OP Mainnet or Optimism earlier.
That is why Kraken collaborated with Trail of Bits, a blockchain cybersecurity company based in New York that will help secure the firm’s kBTC token. The company carried out an audit of the kBTC ERC-20 smart contract and determined the codebase and architecture to eliminate any risks. In response, Kraken pointed out that this audit allows them to assert that they are committed to providing high-security standards for their users.
This comes as Kraken enters the market for WBTC after Coinbase developed its own form of WBTC that operates on the Ethereum and Coinbase Base chain, known as the BTC. These trends point to an upsurge in a race involving top U.S. crypto exchanges to control the Wrapped Bitcoin niche.
This latest move also follows questions raised about the more popular Wrapped Bitcoin (BTC), which is operated by BitGo. There has been worry in the crypto space after BitGo, a popular Bitcoin service company, entered into a deal with Hong Kong-based BiT Global. This has caused debates on how TRON creator Justin Sun may have taken control of this significant Bitcoin liquidity provider.
Transparency and security are essential; they could be the core of what makes kBTC different from other wrapped Bitcoin projects as exchanges try to gain user trust during the growth of DeFi services.
Combined with this new addition to Kraken’s roster, the firm is poised to become an even bigger player in the Ethereum-based Wrapped Bitcoin network. The entry of this crypto exchange in this area underscores the ever-advancing usage of Bitcoin and other digital assets in DeFi and the increasing rivalry between exchanges regarding the provision of safe, compatible, and clear ABs.
