- Kraken’s kBTC is a cross-network ERC-20 token fully backed 1:1 by Bitcoin for DeFi use on Ethereum and OP.
- Kraken ensures transparency of kBTC reserves with on-chain verification and secure Bitcoin custody.
Launching its Wrapped Bitcoin token, or kBTC, Kraken has made a big move in the crypto space. By enabling Bitcoin to be compatible with Ethereum and Optimism (OP) networks, this new token is meant to improve its use.
Operating as an ERC-20 token, completely backed 1:1 by Bitcoin, kBTC is unlike the original Bitcoin and may be utilized easily in decentralized finance (DeFi) applications. Holding the Bitcoin in safe custody and offering on-chain confirmation of the reserves supporting kBTC helps Kraken guarantee openness. The reserves at launch are 100 BTC, split 80% to Ethereum and 20% to OP Mainnet.
Expanding Bitcoin’s Role in DeFi Through kBTC
Introducing kBTC, Kraken hopes to close the utility gap between Bitcoin and other blockchain environments. This action increases the visibility of Bitcoin in DeFi so that customers may use the asset for more diverse financial purposes than only its conventional store-of-value function.
The fact that the token is available on other networks will probably inspire creativity since developers can investigate fresh use cases for Bitcoin among several decentralized apps. Given the great degree of confidence required for such wrapped assets, Kraken has underlined that its 13-year industry performance will guarantee the security and dependability of the kBTC system.
Though with great promise, Kraken has made clear that at launch no spot markets for kBTC would be accessible. Users who want to turn their kBTC back into Bitcoin, however, will have the choice to do so at any moment, therefore providing another degree of freedom with the use of the currency.
Kraken intends to progressively include kBTC with more blockchain systems, therefore enhancing its compatibility and importance in DeFi systems. Particularly in the burgeoning Web3 environment, this launch places Kraken as a major participant in increasing the availability and utility of Bitcoin.
On the other hand, Kraken keeps underlining its presence in worldwide marketplaces. According to CNF earlier on, Kraken obtained a license in Bermuda, enabling it to provide controlled bitcoin derivatives trading with more than 200 contracts.
Because of its clear legislative framework and progressive attitudes regarding digital assets, which support Kraken’s worldwide service diversification strategy, Bermuda has been growingly appealing to crypto firms.
