Wrapped Bitcoin (WBTC) — A Bitcoin Token Community Project started by BitGo, Kyber and Republic Protocol

Taiyang Zhang
Oct 26, 2018 · 4 min read

Introducing Wrapped Bitcoin (WBTC) — a community focused initiative to launch a Bitcoin ERC20 token on Ethereum by January 2019. The project is the culmination of a long-standing joint effort between BitGo, Kyber and Republic Protocol and will serve as important piece of cross-chain infrastructure for the entire industry.

WBTC leverages the Ethereum network to enable new applications and use cases for Bitcoin by combining the liquidity and widespread adoption of Bitcoin, with the extensive smart contract developer ecosystem of Ethereum. This approach compliments both ecosystems utilizing their respective strengths, and expands Bitcoin usage by facilitating more decentralized use cases, such as trading Bitcoin on decentralized exchanges, loans and token payments- which is useful for everyone building in the space.

How it works

WBTC utilizes a custodian model to implement the tokenization of Bitcoin on Ethereum. What that means is that for each WBTC minted into existence, there is an equivalent amount of Bitcoin held in custody in a 1:1 ratio — it is fully backed. The WBTC remains in circulation until the Bitcoin backing it is withdrawn and the equivalent WBTC is burnt. This method is similar to how TUSD operates, except that WBTC has the benefit of the ease of transparency with all custodian funds being fully verifiable on-chain.

BitGo, the market leader in institutional-grade cryptocurrency security, will act as the custodian at launch while Kyber and Republic Protocol will be the first merchants. WBTC can only be minted by the custodian with the merchant’s approval and all freshly minted WBTC will be distributed by the merchants. A Decentralized Autonomous Organization (DAO) comprised of reputable projects in the ecosystem will publicly audit the BTC and WBTC balances and also govern the appointment of any other custodians, merchants, DAO members and improvement proposals.

WBTC will allow any project to include WBTC in their platform without restrictions, while users can easily purchase WBTC tokens on any supported swap service or exchange. A group of industry and Ethereum based ecosystem projects including:

have all committed to support the adoption of WBTC and will participate as launch members. If any other projects are willing to be more involved, please contact by email info@wbtc.network or reach out to any of the projects already involved.

The WBTC minting process.

How WBTC aligns with our approach to cross-chain transactions

The approach taken for WBTC is a pragmatic one and represents an immediate benefit for the DEX ecosystems by opening up a wide range of use cases, along with serving as a catalyst for future tokenization of digital assets on Ethereum.

Atomic swaps remain a core focus for Republic Protocol and will continue to play an important role in our future development with regard to enabling trust-less swaps between many different chains. However the flexibility that ERC20 tokens provide, open up further use cases for our protocol to succeed and provide interest for new development possibilities.

Within the WBTC project, atomic swaps will be utilized as an option for those wishing to exchange between BTC and WBTC. The users and merchants exchanging between BTC/WBTC will either use a trusted exchange or they will do an atomic swap. By enabling atomic swaps, it will help drive adoption of WBTC by providing people with confidence that they can exchange in their BTC/WBTC in a secure manner, at anytime. It will also present another opportunity for our Chrome Plugin Swapper tool which is under development to gain industry wide adoption and exposure.

Prior to launch in January 2019, the full specifications of WBTC will be made known on GitHub/Gitter for all members of the cryptocurrency community to discuss and propose improvements on both the token and the governance model. We invite all the community to participate in the discussion and join the initiative where applicable.

For more information visit https://www.wbtc.network.

About BitGo: BitGo is the market leader in institutional-grade cryptocurrency investment services providing security, compliance, and custodial solutions for blockchain-based currencies.

About Kyber: Kyber’s on-chain liquidity protocol allows decentralized token swaps to be integrated into any application, enabling value exchange to be performed seamlessly between all parties in the ecosystem.

About Ren

Ren is a private and interoperable liquidity layer for decentralized finance. Freely move value between blockchains and transfer tokens in zero-knowledge while maintaining complete privacy.

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