Today we’re announcing Wrapped Bitcoin (WBTC), a collaborative effort with a community of partners to bring Bitcoin to the Ethereum network as an ERC20 token. The token will bring the stability and value of Bitcoin to Ethereum’s expansive ecosystem of decentralized applications.
BitGo will provide custody of the Bitcoin and tokenize it by minting WBTC together with approval from community members. It’s an exciting opportunity for us to build on our mission: making digital currencies usable for business.
WBTC users will be able to utilize Bitcoin in a wide variety of new decentralized use cases, including on decentralized exchanges (DEXs), as collateral for stable coins or lending, for payments and flexible smart contracts within the Ethereum ecosystem. The leading use cases will launch in early January, powered by important decentralized projects including Kyber Network, Republic Protocol, MakerDAO, Dharma, Airswap, IDEX, Compound, DDEX, Hydro Protocol, Set Protocol, Prycto, RadarRelay, and Gnosis.
For the first time, this digital asset will be tokenized with full proof of reserve, backed 1:1 with Bitcoin. Every Bitcoin will be accounted for on a dashboard displaying addresses and balances, and users will be able to verify on the blockchain each Bitcoin that is held in custody. This can be done by comparing the exact number of Bitcoin stored with the total supply of WBTC in circulation via a blockchain explorer like Etherscan.
This transparency brings trust to the digital currency, a critical element for any blockchain ecosystem. Trust is our business (in September we announced the launch of BitGo Trust Company, the first qualified custodian purpose-built for digital assets), and WBTC will employ the same secure processes that we have developed for institutional custody.
We’ve seen significant institutional interest in the tokenization of assets like securities, commodities, and real estate. For BitGo, WBTC is an opportunity to contribute technical leadership to the advancement of blockchain and tokenization platforms. We take a practical approach towards development: engineering and security efforts put into the creation of WBTC will be leveraged towards supporting future asset tokenization.
Last year we worked with industry partners, including the Royal Mint and CME Group, in an effort to tokenize gold, creating Royal Mint Gold (RMG). The WBTC initiative sees the tokenization of “digital gold,” and we look forward to applying our expertise with this token standard to further collaborations.
This is going to be a transformational community effort. We would love to invite all builders that see a need for tokenization and the use of WBTC to reach out and join the project!