Kraken announced on October 17 the launch of its wrapped Bitcoin kBTC, which is cross-network compatible and fully backed 1:1 by the top cryptocurrency. The tokenized BTC token will allow users to engage with it on decentralized applications (dApps), which is made possible through interoperability with blockchains like the OP Mainnet and Ethereum.
Kraken mentioned that its mission was to provide more innovative options to encourage crypto’s fast and global adoption. According to the exchange, the kBTC token will draw on Bitcoin’s positive aspects, including its store of value, security, and the king coin’s limited supply. Kraken added that its wrapped BTC would increase the top crypto’s utility while expanding its use into decentralized finance (DeFi) and beyond.
Kraken has other partners to help with the launch of kBTC. In addition to Ethereum and OP Mainnet, kBTC will launch on Kraken Pro, Kraken Wallet, Yearn Finance, Paraswap, deBridge Finance, Curve Finance, CowSwap, Velodrome, and more. The platforms will allow tokens to be used on DeFi and on-chain activities that BTC does not support.
Kraken assures users of reliable custodial services
Kraken assured users in its announcement that kBTC holders would get 13 years of custodial experience from the exchange. The exchange additionally said that it employed a full-reserve platform and regulations to ensure the security and transparency of its ecosystem.
Kraken revealed that all the Bitcoin that backs kBTC is stored in Kraken Financial. Kraken Financial is a Special Purpose Depository Institution chartered under the Wyoming SPDI Charter.
Kraken talked about its user interface, which allows easy deposits and withdrawals of kBTC. The minimum deposit on Ethereum and OP Mainnet is 0.00026 BTC, while the minimum withdrawal is 0.00001 BTC. The deposit fees will be 0.05%, while there are no withdrawal fees. The exchange insisted that the token currently has no trading pairs but will widen kBTC’s availability in the future.
Users can verify the kBTC contracts
Kraken $kbtc launch is amazing because they already have proof of reserves up on the website.
Are you watching coinbase or are we still supposed to just trust you? pic.twitter.com/4vBVwvZ2sK
— Tux (@megastuffs) October 17, 2024
Kraken further encouraged users to explore its on-chain BTC reserves to confirm the 1:1 kBTC to BTC ratio. After the FTX scandal in 2022, Kraken joined the exchanges that settled for the Proof of Reserve feature. Proof of Reserve allows users to confirm that the fiat deposited by users is equal to the digital assets the exchange says it has in its wallets.
To increase the transparency in issuing the ERC-20 wrapped BTC, Kraken has provided users access to all of the kBTC smart contracts, which they can review for authenticity. Kraken further assured users that the exchange’s development and security teams reviewed the token to ensure its safety. The exchange confirmed that an external crypto security and auditing firm, Trail of Bits, also audited the token’s smart contract.
According to Kraken, the audit checked the token’s code and the distribution architecture to point out any vulnerabilities the coin might have. The report assured that kBTC did not have any security issues. Kraken also provided the OP Mainnet and Ethereum kBTC smart contracts and the Bitcoin custody address.
