Now that Bitcoin is wrapped, holders may connect with decentralized applications.
According to Mike Belshe, CEO of digital asset custodian BitGo, as reported by Cointelegraph, Alameda Research sought to redeem 3,000 Wrapped Bitcoins (wBTC) in the days before FTX’s bankruptcy declaration on November 11.
During a Dec. 14 Twitter Spaces hosted by decentralized finance (DeFi) researcher Chris Blec, Belshe admitted that the company turned down the redemption request because the unnamed Alameda representative involved failed Bitgo’s security verification process and displayed confusion regarding the operation of the wrapped-Bitcoin burning process.
wBTC, a tokenized version of BTC, may be exchanged for BTC, according to Cointelegraph, when submitted to a burn address, which releases BTC. The conversion follows a 1:1 ratio.
Thanks to tokenization, owners of wrapped Bitcoin may now interact with decentralized applications and smart contracts created on the Ethereum network. 2019 saw Bitgo work with the multi-chain liquidity platform Kyber and the blockchain interoperability protocol Ren to build wBTC. Additionally, wBTC is managed by the decentralized autonomous organization wBTC DAO, which has more than 30 members.
The wBTC dashboard shows that BitGo now has 202,255 BTC vs the 199,238 wBTC that are in circulation, resulting in an over-collateralization rate of 101.51%.
