Bitcoin-Backed Token tzBTC Will be Issued on Tezos Blockchain

Bitcoin-Backed Token tzBTC Will be Issued on Tezos Blockchain

The first token version of bitcoin on the Tezos blockchain, tzBTC, will be issued by Bitcoin Association Switzerland, Tezos Foundation and many partners. Also the asset will be the first vehicle for Decentralized Finance (DeFi) based in Tezos, according to a press release from the association.

Each tzBTC on the Bitcoin blockchain represents one bitcoin and is minted under the new standard token FA1.2 Tezos.

“The tzBTC brings the brand and liquidity of Bitcoin to the Tezos blockchain and gains the potential for rich functionality made possible by Tezos smart contracts,” Bitcoin Association Switzerland President Lucas Betschart said in a statement.

Last week, tBTC, announced another wrapped bitcoin project for Ethereum. “Building a bridge that allows Bitcoin to interact with DeFi makes a lot of sense,” investor Fred Ehrsam said about that project. A similar logic follows when adding a Tezos bridge to the most liquid crypto-currency.

Roman Schnider, CFO and head of operations at the Tezos Foundation, said bitcoin’s addition is only the tip of the spear as the community builds DeFi products on Tezos.

“This is kind of the first [wrapped] product that we see and there’s not much you can trade against at the moment, but there is a roadmap,” Schnider said in a phone interview.

Next up, said Schnider, are atomic swaps to build up DeFi exchanges, and maybe a wrapped ether (ETH) token.

DeFi grew rapidly in 2019 on Ethereum and began largely with Wrapped Bitcoin (WBTC) released on platforms like bZx, Compound, and dYdX. A little over a year later, and according to DeFi Pulse, WBTC makes up a small percentage of the $700 million market cap in Ethereum-based DeFi.

Token Could Soon be Joined by StakerDAO

On Tezos tzBTC won’t be alone, though. According to its website, the token could soon be joined by Tezos-based DeFi protocol StakerDAO, which plans to launch this quarter. StakerDAO automates the capital allocation to stake on different protocols to earn investor yields.

According to the token website, tzBTC will be supervised by numerous organisations. Switzerland’s Bitcoin Association will regulate “keyholders” who mint and burn tzBTC. Keyholders include the Swiss crypto companies Inacta, Lexr, Taurus and Swiss Crypto Tokens.

Betschart said the idea originated first with Swiss Crypto Tokens, but the non-profit took on the project that retains a bent bitcoin-first.

“Our interest is to push the adoption of bitcoin. So we’re already involved with some other things … to make bitcoin even more usable,” Betschart said.

0 0 vote
Article Rating
Share this page
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
Abdulhay Mahmoud 414 Articles
Abdulhay Mahmoud is a creative writer with over 15 years of experience in journalism, translation, and investor relations. He has B.A in English and Literature from a reputable University. He recently became a contributor at Cryptolydian.com to fulfill his thirst in reporting digital coins and blockchain-related news, an interest was built over the years.