Kraken Unveils a New Wrapped Bitcoin Product—Here’s What It Means for Defi

Kraken Introduces KBTC to Enhance Bitcoin’s Utility Across Networks

Kraken’s KBTC is an ERC20 token that allows bitcoin ( BTC) to interact with decentralized applications ( dApps) across Ethereum and OP Mainnet. According to Kraken, ach KBTC token is backed by an equivalent amount of bitcoin stored in Kraken’s custody. This backing can be independently verified through onchain reserves, ensuring transparency for users who wish to confirm that bitcoin holdings truly support their KBTC.

Kraken stated on Thursday:

We are thrilled to launch Kraken Bitcoin (KBTC), a fully backed, cross-network-compatible ERC20 representation of bitcoin custodied by Kraken.

By launching KBTC, Kraken intends to extend the utility of bitcoin, enabling it to participate in decentralized finance, a rapidly growing sector. The ability for bitcoin to be integrated into defi platforms opens new opportunities for users to leverage bitcoin in lending, borrowing, and other financial activities. This integration marks an important step in bridging bitcoin with other blockchain ecosystems, broadening its potential applications beyond a store of value.

KBTC is built on Kraken’s existing security infrastructure, with a rigorous auditing process conducted by third-party firm Trail of Bits, the company explained. This audit aimed to identify and address any security vulnerabilities within the KBTC smart contract, which has been designed to ensure that users’ assets remain protected as they explore bitcoin’s expanded use cases in various blockchain networks.

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