• Crypto exchange Kraken has launched its own version of wrapped bitcoin, kBTC — a fully backed, cross-network compatible ERC-20 token.
• Kraken’s launch follows the recent introduction of Coinbase’s wrapped bitcoin asset, cbBTC.

Crypto exchange Kraken has rolled out its own version of wrapped bitcoin on Ethereum and OP Mainnet amid an increasingly competitive lineup of alternatives.

In a Thursday blog post, Kraken described kBTC as a cross-network compatible ERC-20 token, fully backed 1:1 by an equivalent amount of bitcoin custodied at Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution.

The exchange also disclosed an onchain address for the product’s reserves, enabling users to verify the backing of kBTC themselves. The custody address shows a current balance of 100 BTC ($6.7 million), which corresponds to an 80 kBTC and 20 kBTC supply on Ethereum and OP Mainnet, respectively. 

The wrapped bitcoin asset, audited by Trail of Bits, can now be used within various compatible decentralized applications on Ethereum and OP Mainnet, with plans to extend compatibility to additional networks, including non-EVM ecosystems. Day one launch partners include deBridge, Definitive, Gauntlet, ParaSwap and Yearn, Kraken confirmed.

“We’ve always championed the transformative potential of Bitcoin, the original and most resilient digital asset ever created,” Kraken wrote in the post. “Now, with kBTC, you’re not just getting a wrapped token that lets you dive deeper into DeFi, you’re getting Kraken’s 13+ years of industry-leading custody infrastructure.”

Growing wrapped bitcoin competition

Kraken’s kBTC launch comes just a month after rival crypto exchange Coinbase introduced its wrapped bitcoin alternative, cbBTC on Ethereum and Base. Coinbase said it is also working to expand native cbBTC support to additional chains.

Both tokens will compete with Wrapped Bitcoin (WBTC) — currently the largest tokenized BTC product with a market cap of $10 billion, according to The Block’s WBTC Price Page.

The respective launches come after BitGo, the custodian of WBTC, announced a new partnership plan with Hong Kong-based BiT Global — linked to Tron founder Justin Sun — to manage WBTC custody in August.

BitGo said it will become a minority owner in a joint venture with BiT Global, aiming to offer “multi-jurisdictional and multi-institutional custody” for the WBTC business. However, the development raised security concerns in the crypto community, influenced by Sun’s controversial reputation and the potential centralization of control, with Coinbase and Kraken seemingly sensing an opportunity to grab market share.

Written by James Hunt for theblock.co