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2019-02-01 21:04:11

Wrap Your Head Around This: BTC Is Now Featured as a Token on Ethereum

 

It happened: Bitcoin is now an Ethereum token.Wrapped Bitcoin (WBTC), an ERC-20 token with a 1-1 peg to bitcoin, went live on the Ethereum network on the final day of January, “the first token that makes Bitcoin compatible with the Ethereum chain,” its architects say.Kyber Network, Bitgo and Ren spearheaded the “community led” initiative, which has spread its reach to AirSwap, BitGo, Blockfolio, Compound, DDEX / Hydro, Dharma, Gnosis, GOPAX, Kyber Network, Loopring Protocol, MakerDAO, OmiseGO, Prycto, Ren, Set Protocol, and TheOcean. These members of the WBTC DAO are a mixture of liquidity, infrastructure and custodial partners. The token’s network will rely on some of them to facilitate BTC to WBTC swaps for its users.To exchange their BTC for WBTC or vice versa, users must enter into a request with a WBTC merchant, someone who basically “sells” (or more accurately, distributes) WBTC to users in exchange for bitcoin (or bitcoin in exchange for WBTC) and go through KYC. These merchants act as a go-between for the user and the network’s liquidity pool, the custodians.That merchant takes this request to a custodian, who will either deny or honor the request and mint or burn WBTC for the user. Minting and burning takes place directly between the merchant and the custodian through an atomic swap, a protocol that allows users to trustlessly trade assets cross-chain —in this case, BTC and WBTC.To trigger the ...

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