21.co, the parent company of 21Shares, has announced the launch of its Wrapped Bitcoin (21BTC) product on the Ethereum blockchain in collaboration with Flow Traders. The product aims to provide users with greater security while navigating decentralized applications and exploring new possibilities on the Ethereum blockchain.
About 21BTC Product
The 21BTC product uses cold storage to safely hold the underlying assets, avoiding the necessity for a bridge. The token is collateralized by BTC and is created on different blockchains. Token holders can exchange their tokens for native BTC by burning them.
WBTC Issues
WBTC, the widely-used Bitcoin wrapper, is encountering difficulties due to heightened scrutiny related to issues with BitGo and TRON creator Justin Sun. BitGo revealed its intention to relinquish management of WBTC to a collaborative enterprise between BiT Global and Sun, causing concern within the community. As a result, the lending protocol Sky implemented a restriction on new users borrowing against WBTC, leading to a decrease in demand for the asset. According to Dune Analytics statistics, the supply of WBTC declined by more than 1,000 tokens last month, making it the third-largest monthly decrease this year.
Competition in the Wrapped Bitcoin Market
Rival companies, such as Coinbase, are aiming to disrupt BitGo's dominant position in the market. The DeFi protocol Threshold has suggested consolidating its BTC “wrapper” token, tBTC, with WBTC in order to preserve the more widely accepted BTC commodity.
The launch of 21BTC on Ethereum by 21.co in collaboration with Flow Traders signifies the company's efforts to enhance user security while navigating decentralized applications. While WBTC faces challenges, the Wrapped Bitcoin market continues to evolve and attract new players.
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