21.co, the father or mother firm of asset administration agency 21Shares, has built-in Chainlink Proof of Reserve on the Ethereum and Solana mainnet to bolster transparency of its wrapped Bitcoin product, 21BTC, in keeping with a Sept. 23 assertion.
The corporate will use Chainlink’s Proof of Reserve by way of its digital asset platform, Onyx, to automate real-time reserve verification to make sure safe minting of 21BTC.
The agency mentioned the mixing will instantly end in decentralized oversight and transparency, which can profit customers and improve confidence within the token. Customers will be capable to independently confirm asset collateralization in actual time.
21BTC was first launched on Solana in Could and in a while Ethereum in September. It’s a totally backed token with 1:1 Bitcoin reserves held in chilly storage.
Johann Eid, Chief Enterprise Officer at Chainlink Labs, mentioned:
“Proof of Reserve’s function in enabling a safe minting operate is a key step to making a dependable framework that permits for the tokenization of trillions of {dollars} in worth.”
Coinbase rival’s challenges
Whereas 21.co has centered on bettering transparency for 21BTC, Coinbase’s wrapped Bitcoin (cbBTC) continues to face scrutiny.
On Sept. 23, 0xngmi, the founding father of DeFillama, criticized Coinbase’s cbBTC’s lack of transparency. He mentioned:
“Virtually each single bridge (together with WBTC) offers a Proof of Reserves so you possibly can test that the issued cash are backed. However Coinbase doesn’t, cbBTC is means beneath the usual when it comes to transparency.”
This comes as Coinbase’s Chief Authorized Officer, Paul Grewal, additionally needed to tackle issues about cbBTC’s phrases of service. Some X customers had raised alarms that the alternate could not totally reimburse misplaced Bitcoin in circumstances of malicious exercise or unexpected occasions.
Nevertheless, Grewal clarified that Coinbase’s legal responsibility solely covers the Bitcoin misplaced. It doesn’t prolong to losses from trades or leveraged positions. He said:
“It’s a limitation on legal responsibility that’s fairly primary: we aren’t chargeable for greater than the BTC we lose. This language additionally makes clear the custodial relationship.”
Regardless of these issues, cbBTC has gained traction, with practically 3,000 tokens circulating inside two weeks of its launch. It has shortly turn into the third-largest wrapped Bitcoin token, with a market capitalization of round $170 billion and a buying and selling quantity that has surpassed $1 billion within the final 24 hours, in keeping with Dune Analytics information.
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