Kraken launches Wrapped Bitcoin (kBTC), an ERC-20 token entirely backed by Bitcoin, to increase adoption and utility on decentralized finance (DeFi) platforms.
Kraken, a leading crypto exchange, has recently introduced Wrapped Bitcoin (kBTC), a new ERC-20 token, generating optimism in the market.
This token aims to expand Bitcoin’s utility by allowing it to be used across decentralized finance (DeFi) platforms.
Kraken’s kBTC is fully backed 1:1 by Bitcoin, securely held in the exchange’s custody solution.
Kraken Launches kBTC Sparking Market Optimism
Kraken, the major cryptocurrency exchange, recently announced the debut of Wrapped Bitcoin (kBTC), which will increase BTC’s market appeal.
The launch is expected to enhance Bitcoin’s value on blockchain networks such as Ethereum and OP Mainnet, a former version of Optimism.
As an ERC-20 token, kBTC will enable BTC to be utilized on DeFi platforms, boosting its utility beyond being merely a store of value.
Kraken emphasizes that the product is designed to leverage Bitcoin’s core attributes, such as security and scarcity, while seamlessly integrating it into DeFi.
Additionally, the smart contract behind kBTC has been thoroughly audited by Trial of Bits, reinforcing user safety.
Kraken ensures that users can verify kBTC on-chain at any time, increasing confidence in the token’s legitimacy.
Wrapped Bitcoin tokens, like kBTC, offer the opportunity to trade, lend, or use BTC as collateral on DeFi platforms, a capability previously unavailable on these networks.
Wrapped BTC Competition Rises
Kraken’s move follows closely behind Coinbase’s launch of its own Wrapped Bitcoin token, cbBTC.
As major exchanges aim to strengthen Bitcoin’s role in DeFi, these wrapped tokens provide users with greater flexibility in managing their BTC holdings.
While tokens like WBTC already hold a significant market share, Kraken hopes to differentiate kBTC through transparent and secure backing, further reinforcing BTC’s position in the DeFi space.
This development comes amid increasing institutional interest in Bitcoin, highlighted by the US Bitcoin Spot ETF, which has seen over $20 billion in inflows, and BlackRock’s recent acquisition of 5,805 BTC in a single day.
Additionally, Bitcoin recently reached $68,000, reflecting growing market confidence in the cryptocurrency.
