Kraken has launched a new wrapped Bitcoin product known as kBTC, as announced in their statement on October 17. This innovative token aims to capitalize on the burgeoning wrapped asset market.
What is kBTC?
kBTC is an ERC-20 token fully backed by Bitcoin, maintaining a secure 1:1 backing ratio. Each kBTC corresponds to the equivalent amount of Bitcoin that is safely stored under Kraken’s custody, with on-chain reserves that can be publicly verified. Additionally, kBTC has undergone thorough audits from the security firm Trail of Bits.
Enhancing Bitcoin’s Utility
The introduction of kBTC reflects Kraken’s commitment to enhancing global cryptocurrency adoption. The token is designed to harness Bitcoin’s benefits while broadening its applications across DeFi sectors and other blockchain networks. Notable launch partners include:
- deBridge
- Definitive
- Gauntlet
- ParaSwap
- Yearn
Kraken emphasized:
“kBTC provides a secure, fully-backed solution that unlocks Bitcoin’s unparalleled value and potential across a diverse range of ecosystems.”
Cross-Network Applications
kBTC is engineered for use in decentralized applications (dApps), offering compatibility with networks such as Ethereum and OP Mainnet. Kraken plans to extend this compatibility to additional blockchain ecosystems beyond those that support Ethereum Virtual Machine (EVM).
Current kBTC Supply Statistics
As of now, the total kBTC supply stands at 100 BTC, which is approximately valued at $6.75 million. The distribution of kBTC is as follows:
- 80 kBTC is actively circulating on the Ethereum network, held across 17 wallets.
- 20 kBTC is located on the OP Mainnet, distributed among 11 holders.
Market Competition for Wrapped Bitcoin
Kraken’s foray into wrapped Bitcoin comes at a time when competition in this market segment is heating up. Currently, BitGo’s Wrapped Bitcoin (WBTC) holds a dominant 90% market share, with a market capitalization around $10 billion.
September saw Coinbase introduce its new wrapped Bitcoin product, cbBTC, available on both Ethereum and Base. Plus, 21.co, the parent company of 21Shares, has also released their wrapped Bitcoin, 21BTC.
The influx of new wrapped Bitcoin offerings follows BitGo’s controversial partnership announcement with Hong Kong-based BiT Global, a firm associated with Tron founder Justin Sun. This partnership has raised concerns within the crypto community, prompting DeFi platforms like Sky (formerly known as MakerDAO) and Aave to consider ceasing support for WBTC.