Kraken, a well-known crypto exchange, has recently announced the launch of its own wrapped bitcoin token called kBTC. This token will be available on both the Ethereum and OP Mainnet, allowing users to trade, lend, and borrow bitcoin on decentralized finance (DeFi) platforms. The token will be backed 1:1 with bitcoin, custodied in Kraken Financial, the exchange’s U.S. qualified custody solution.
Wrapped tokens like kBTC play a crucial role in the DeFi space by enabling the use of unsupported crypto assets on various blockchains. For example, the largest wrapped bitcoin token, WBTC, has a market capitalization of around $10 billion and is widely used as collateral in lending DeFi.
Kraken is not the only player entering the wrapped bitcoin market, as rival exchanges like Coinbase have also launched their own versions of wrapped bitcoin tokens. At launch, kBTC will be supported by several DeFi applications, including Kraken, Ethereum, Optimism, and partners like Paraswap, Yearn, and Morpho.
While there won’t be any supported spot markets for kBTC at launch, users can still redeem their kBTC for the underlying bitcoin and trade it as they normally would. The minimum deposit size for kBTC on both Ethereum and Optimism will be 0.00026 BTC, which is approximately $15 at a bitcoin price of $60,000.
Kraken’s global head of asset growth and management, Mark Greenberg, expressed the company’s commitment to accelerating the adoption of DeFi through the launch of kBTC. He emphasized Kraken’s focus on providing a seamless user experience and top-of-the-range security to bring DeFi to new users and drive the adoption of decentralized applications.
Overall, the introduction of kBTC by Kraken signals the exchange’s dedication to expanding its offerings in the DeFi space and providing users with more opportunities to engage with digital assets across different blockchains. As the cryptocurrency industry continues to evolve, initiatives like kBTC play a vital role in shaping the future of decentralized finance and driving innovation in the space.