Kraken Launches kBTC: Bringing Bitcoin to DeFi Without Conversion
Kraken, one of the world’s largest cryptocurrency exchanges, has announced the launch of its new Bitcoin wrapped token, kBTC.
This token will be available on both the Ethereum network and the OP Mainnet, providing a new option for those looking to use their bitcoins in the decentralized finance (DeFi) ecosystem.
Bitcoin Wrapped for DeFi
kBTC is designed to allow Bitcoin holders to access DeFi services on the Ethereum and Optimism networks without having to convert their assets. Being wrapped, kBTC is backed at a 1:1 ratio with the underlying BTC. This Bitcoin will be held in a qualified custody solution secured by Kraken Financial, Kraken’s US-based financial service division.
Transparency is crucial to Kraken, and the custody wallet address will be made public, allowing users to verify at any time that the reserve bitcoins match the circulating kBTC. This model is similar to other wrapped tokens, such as Wrapped Bitcoin (WBTC), which already plays a key role as collateral in DeFi applications.
Supported by Leading Partnerships
Upon launch, kBTC will be integrated into several top DeFi applications, offering immediate compatibility with platforms like Paraswap, Yearn, Curve, Morpho, and more. Kraken has not planned a spot market for kBTC yet, but users will be able to convert their kBTC into native Bitcoin and trade it as they usually would.
The minimum deposit for kBTC on Ethereum and Optimism will be 0.00026 BTC, around $17 at a Bitcoin price of $65,000. This makes kBTC more accessible to a wide range of users, facilitating their entry into the DeFi ecosystem.
Responding to Increased Competition in the Wrapped Bitcoin Market
The launch of kBTC comes amid increased competition in the world of wrapped tokens. Recently, platforms like Coinbase have launched their own versions, with cbBTC on Ethereum and Base. Kraken seems to position itself as a major player in this rapidly expanding market by offering a wrapped solution to its users while highlighting its advantages in security and asset management.
Accelerating DeFi Adoption
With kBTC, Kraken aims to play a key role in the mass adoption of decentralized applications (dApps). The company sees a future in which traditional networks like Bitcoin and DeFi solutions on Ethereum and Optimism are increasingly interconnected.
We firmly believe in an on-chain future where decentralized finance will play a central role.
Mark Greenberg, Global Head of Asset Growth and Management at Kraken
He adds that kBTC leverages Kraken’s expertise in user experience and security, making it easier for new users to adopt DeFi.
