Kraken, one of the world’s leading cryptocurrency exchanges, just announced the launch of Kraken Wrapped Bitcoin (kBTC) — a fully-backed tokenized version of Bitcoin that can be used across multiple blockchain networks.
Each kBTC token is backed 1:1 by an equivalent amount of Bitcoin held by Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution. The Bitcoin is secured by Kraken and can verified by checking Kraken’s reserves onchain.
The new kBTC token can be used across a myriad of Decentralized Finance (DeFi) apps and has interoperability with blockchains including OP Mainnet (formerly Optimism) and Ethereum. Although no timelines was announced, Kraken said it has plans to expand to other blockchains in the future, including those that are not EVM compatible.
With the launch of kBTC, the company hopes users can delve deeper into the world of DeFi while having access to Kraken’s industry-leading custody infrastructure and top level security. As Bitcoin’s value and potential is unlocked across multiple ecosystems, investors can diversify their onchain portfolios, and developers can enhance their dApps with Bitcoin integration.
In a press release about the launch, Kraken said that “kBTC reinforces Bitcoin’s position as the epicenter of crypto,” and that it will empower “crypto builders to explore new ways to use Bitcoin.”
Trail of Bits, an external security auditing firm that has worked on other projects like WorldCoin, evaluated the kBTC ERC-20 smart contract, examining its codebase and client architecture to address potential security vulnerabilities. Some of Kraken’s partners for the launch include Gauntlet, Definitive, deRidge, and Yearn.
What are wrapped crypto assets?
Wrapped crypto assets are tokens that are backed 1:1 by an underlying asset. The original asset is “wrapped,” or stored, in a digital vault and a new token is minted that can transact on other platforms like MetaMask or Uniswap, essentially enabling interoperability across multiple blockchains.
Currently, the largest wrapped crypto is Lido’s Wrapped Staked Ether (STETH), which has a market capitalization of around $25.2 billion, according to data from CoinGecko.
Kraken Continues to Be a Leader in the Crypto Space
While Kraken may not be as widely recognized as other centralized exchanges like Coinbase and Binance, the company founded by Jesse Powell in 2011 with the mission to accelerate the adoption of cryptocurrency continues to be a major leader in the space. At Rarity Sniper, we’ve covered several articles about Kraken this year. Here are some of the top headlines:
- Kraken May Go Nuclear to Meet Global Crypto Demand
- Kraken Teams Up with DeGod’s Dust Labs for Art Basel in Miami
- Formula 1 Racers Unveil their Kraken NFTs
- Kraken, F1’s Williams Racing to Bring NFTs to Grand Prix
- Kraken’s NFT Marketplace Graduates Beta
Although Kraken still has some issues to work out with the U.S. Securities and Exchange Commission (SEC), which sued the company last year claiming that it was an unregistered securities exchange, it remains one of biggest and most respected crypto exchanges in the world.
The move to launch Kraken Wrapped Bitcoin this week shows that Kraken is still dedicated to its users and its original mission. Furthermore, as the U.S. approaches its presidential election next month, the general tune around crypto in U.S. politics is starting to become more positive, and that’s certainly good news for Kraken, as well as the rest of us in the space.