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A wrapped bitcoin token was launched on the Tezos blockchain

By Inkarias - 2020-04-10

In the past days, The Bitcoin Association Switzerland, namely BSA, announced the creation of a new group of crypto societies that collectively launched a customized tokenized version of Bitcoin, the tzBTC, based on the Tezos blockchain. With a native technical principle similar to well-known and widely used wrapped BTC on Ethereum chain, each tzBTC is backed by an equivalent amount of Bitcoin. But, at the opposite of the standard process of creating WBTC, which relies solely on crypto custodian BitGo, four different companies, called Keyholders, have the ability to mint and burn tzBTC to maintain the 1:1 ratio over time. The BSA entity serves as a third-party mediator to uphold the integrity of these four Keyholders, creating a more robust, albeit still trusted, checks-and-balances system. The vision implemented with this system guarantees complete safety for investors and users.

The importance of this new token and information

The newest introduction of this token could provide a great improvement to Tezos’ constant efforts to build out a decentralized finance ecosystem. However, with the current situation, network’s DeFi offerings and uses cases for the tzBTC token are relatively limited. Finally, StakerDAO, a secure and commonly used app that allows investors to earn yield on various protocols plans to launch its first product, called Blend, on Tezos at some point in this quarter. This might be subject to change depending on market conditions. The last main concern about the future is the actual demand for Bitcoin use in DeFi applications. WBTC currently accounts for about 1% of the total value locked in Ethereum’s DeFi sector, according to DeFi Pulse study. Keep Network has faced a similar skepticism as some believe Bitcoin holders are wary of using novel and relatively untested blockchain-based apps.
More details about tzBTC at https://www.woorton.com/tzBTC.php