How Wrapped Bitcoin (WBTC) Happened and Its Purpose
Back in 2018, a few months after we launched Kyber on Ethereum's mainnet, the decentralized finance (DeFi) space was still in its early days. There weren’t many high-liquidity altcoins on Ethereum, and the entire decentralized exchange (DEX) ecosystem was seeing less than $1 million in daily trading volume. DeFi's total value locked (TVL) was only in the tens of millions. We realized that to really help DeFi grow, we needed to bring Bitcoin liquidity into the ecosystem.
We discussed the problem within our team— @vutran54 , @weremeow , @realYaronVelner everyone was really supportive and excited. The main challenge was figuring out the technical solution. We knew there would be some trade-offs between technical complexity and trust, no matter what we chose. Around that time, I was catching up with an old friend, @bencxr , who was the CTO of BitGo, when he visited Singapore. I openly discussed the problem with Ben, and he was very supportive & saw the importance. We eventually decided to work with a centralized custodian model to keep the design simple and avoid hidden technical risk. BitGo, with Ben’s support, was the right partner to handle this.
We also brought in @renprotocol (known as Republic Protocol back then) as another founding project, but most of the work was done between Kyber and BitGo. BitGo managed most of the off-chain technical and legal work, such as the minting and burning process, integrating with BitGo custody, and setting up a transparency dashboard. Meanwhile, Kyber handled the smart contracts, partner and community outreach. Yaron was in charge of the smart contract and the DAO, Meow made sure everything launched in the right direction & with the good narrative, and @0xBoyeon led the partner onboarding & coordination.
We decided not to call it Kyber BTC or BitGo BTC because we wanted it to be a public good. We went with a neutral brand—Wrapped BTC (WBTC) because envetually no one owns this project. We also worked hard to explain to everyone why having Bitcoin liquidity on Ethereum was so important & asked for their support. It wasn’t a hard sell; most people agreed it needed to be done, but no one had taken the plunge yet. Eventually, we got support from the broader DeFi ecosystem and launched WBTC with backing from most of the high-profile DeFi projects at the time.
Fast forward to today, and WBTC has around $9 billion USD in TVL and is considered the de facto Bitcoin token on Ethereum and other EVM chains. I think a few things contributed to its success: a community-centric approach, a simple and easy-to-understand tech design where trust is clearly stated, and of course, being the first mover.
Recently, we were surprised by some changes BitGo made, and we want to understand their motives better. WBTC is in a stable condition and doesn’t require changes to thrive, thanks to its already wide adoption and industry trust. However, this sudden move by BitGo makes everyone question whether that trust has been broken and what risks it might pose to the future of WBTC under BiT Global.
We’re eager to learn more in the upcoming Space with Meow, @mikebelshe, and @justinsuntron .
Back in 2018, a few months after we launched Kyber on Ethereum's mainnet, the decentralized finance (DeFi) space was still in its early days. There weren’t many high-liquidity altcoins on Ethereum, and the entire decentralized exchange (DEX) ecosystem was seeing less than $1 million in daily trading volume. DeFi's total value locked (TVL) was only in the tens of millions. We realized that to really help DeFi grow, we needed to bring Bitcoin liquidity into the ecosystem.
We discussed the problem within our team— @vutran54 , @weremeow , @realYaronVelner everyone was really supportive and excited. The main challenge was figuring out the technical solution. We knew there would be some trade-offs between technical complexity and trust, no matter what we chose. Around that time, I was catching up with an old friend, @bencxr , who was the CTO of BitGo, when he visited Singapore. I openly discussed the problem with Ben, and he was very supportive & saw the importance. We eventually decided to work with a centralized custodian model to keep the design simple and avoid hidden technical risk. BitGo, with Ben’s support, was the right partner to handle this.
We also brought in @renprotocol (known as Republic Protocol back then) as another founding project, but most of the work was done between Kyber and BitGo. BitGo managed most of the off-chain technical and legal work, such as the minting and burning process, integrating with BitGo custody, and setting up a transparency dashboard. Meanwhile, Kyber handled the smart contracts, partner and community outreach. Yaron was in charge of the smart contract and the DAO, Meow made sure everything launched in the right direction & with the good narrative, and @0xBoyeon led the partner onboarding & coordination.
We decided not to call it Kyber BTC or BitGo BTC because we wanted it to be a public good. We went with a neutral brand—Wrapped BTC (WBTC) because envetually no one owns this project. We also worked hard to explain to everyone why having Bitcoin liquidity on Ethereum was so important & asked for their support. It wasn’t a hard sell; most people agreed it needed to be done, but no one had taken the plunge yet. Eventually, we got support from the broader DeFi ecosystem and launched WBTC with backing from most of the high-profile DeFi projects at the time.
Fast forward to today, and WBTC has around $9 billion USD in TVL and is considered the de facto Bitcoin token on Ethereum and other EVM chains. I think a few things contributed to its success: a community-centric approach, a simple and easy-to-understand tech design where trust is clearly stated, and of course, being the first mover.
Recently, we were surprised by some changes BitGo made, and we want to understand their motives better. WBTC is in a stable condition and doesn’t require changes to thrive, thanks to its already wide adoption and industry trust. However, this sudden move by BitGo makes everyone question whether that trust has been broken and what risks it might pose to the future of WBTC under BiT Global.
We’re eager to learn more in the upcoming Space with Meow, @mikebelshe, and @justinsuntron .
https://x.com/weremeow/status/1823223131269443654
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