The Kraken’s launch of Wrapped Bitcoin will further enhance the mainstream adoption of BTC through Web3 space across different chains.
The Kraken cryptocurrency exchange, a tier-one Web3 company based in the United States, has launched a wrapped version of Bitcoin BTC $88 089 24h volatility: 0.1% Market cap: $1.76 T Vol. 24h: $16.23 B on the Ethereum ETH $2 977 24h volatility: 0.1% Market cap: $359.17 B Vol. 24h: $7.47 B network. The Kraken’s latest BTC product dubbed Kraken Wrapped Bitcoin (kBTC) will be fully backed and verifiable on the blockchain at all times. Furthermore, kBTC users can seamlessly swap the ERC-20 BTC version for Bitcoin’s on-chain asset at any time.
As a cross-chain compatible ERC-20 token, the kBTC will also be available on the Optimism (OP) network, a top-tier scaling solution on the Ethereum network.
The cryptocurrency exchange intends to fully back the kBTC and hold the coins on its custody platform for ultimate security. The company intends to tap on Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution (SPDI), to ensure the security of the Bitcoins used to facilitate the wrapping of the kBTC.
As a result, kBTC can be used seamlessly on various decentralized financial (DeFi) ecosystems over time.
“With kBTC, you’re not just getting a wrapped token that lets you dive deeper into DeFi, you’re getting Kraken’s 13+ years of industry-leading custody infrastructure. This ensures that when you use kBTC, it is backed 1:1 by Bitcoin, securely stored, and always accessible,” Kraken noted.
As of this report, on-chain data shows that kBTC has a total market cap of $6.7 million, with 80 percent on the Ethereum network while the remaining is wrapped on the Optimism network.
Kraken Remains Committed to the Long-Term Success of Bitcoin
Kraken exchange has been a major contributor to the mainstream adoption of Bitcoin in the past years in a regulated manner. As a top-tier cryptocurrency exchange, with over 760 crypto trading pairs, Kraken regulated a net daily traded volume of more than $630 million. In the past quarter, Kraken reported a cumulative trading volume of about $207 billion.
Having existed since 2011, Kraken has attracted more than 10 million registered users, thus acting as a major intermediary to mainstream crypto adoption.
However, Kraken has embarked on a journey to further enhance the utility of Bitcoin through the web3 space. The kBTC will play a crucial role in the liquidity management of Bitcoin and other digital assets.
However, some industry experts have raised security concerns about the adoption of wrapped versions of Bitcoin. Moreover, the Wrapped versions of Bitcoin are highly centralized, thus losing the initial intention of Satoshi Nakamoto to outstrip the traditional financial system.
Market Impact
The Bitcoin network is fast adopting the DeFi space in a bid to compete with the altcoin industry. As of this writing, the Bitcoin network had a total value locked (TVL) of about $1.3 billion, from DeFi protocols such as SolvBTC LST, AILayer farm, and Lorenzo Protocol, among others.
The notable growth of web3 space in the Bitcoin network has significantly contributed to the underlying value, which has regained the crucial support level above $67k.
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