Wrapped Bitcoin will be a 1:1 bitcoin backed up token that seeks to transport the benefits of the liquidity of Bitcoin to the Ethereum network, to make decentralized exchanges able to trade bitcoin in the form of this token, to give them more relevance. The project is supported by more than 16 exchanges and cryptocurrency related startups that have seen the power of having a bitcoin equivalent in the Ethereum Network.
Why Wrapped Bitcoin?
Many could find this as ridiculous and Andreas Antonopoulos that commented that this was like getting a blockchain into another blockchain. Indeed it is something like that. But as strange as it might sound, it does really have cases of use. One of the first benefits of tokenization is the speed of transactions. Tokens in the ethereum blockchain move faster than on-chain bitcoin transactions, and they bet that peple will be able to change to a token by this speed edge.
But the main objective of this proposal is to feed liquidity into exchanges in the form of wrapped bitcoin / ethereum pairs, so decentralized exchanges could grow in size and notoriety. Currently, decentralized exchanges don’t have much support and are virtually negligible in market share.
BitGo, Kyber Network, and Republic Protocol, MakerDAO, Dharma, Airswap, IDEX, Compound, DDEX, Hydro Protocol, Set Protocol, and Prycto are part of the institutions that are actively supporting the launch of this controversial token.
The announcement also says that this token will be launched on the next January, and that the roles of the actors in the blockchain have already been announced, with Bitgo, a small exchange, serving as custodian of the tokenized bitcoins.
The information about the state of the network and how many bitcoins have been tokenized will be available to everyone on the networks and will be shown and audited easily by any party interested.
Kyber and Republic Protocol, two exchanges, will be the ones responsible for inventory to provide initial liquidity and make WBTC available to early adopters and first buyers
It Does Not Stop
The people responsible for bringing bitcoin to ethereum have declared that this technological process can be done for every great cryptocurrency out there. Benedict Bach, CFO of BitGo declared that “We are really excited to tokenize the most widely accepted cryptocurrency on Ethereum”
So in the future, they could be tokenizing more cryptocurrencies to make them available and listed on decentralized exchanges like EOS and stablecoins. Bitcoin wrapped is just the beginning for this new trend of tokenization.