21Shares, through its parent company 21.co, has unveiled 21BTC, a new Wrapped Bitcoin offering on the Ethereum blockchain. Teaming up with global market maker Flow Traders, 21Shares aims to deliver a secure and efficient experience for users engaging with decentralized applications on Ethereum.
Head of strategy and business development at 21.co, Eliezer Ndinga, underlined the company’s proficiency in issuing crypto ETPs, emphasizing their commitment to sound asset management practices and strong security measures. Notably, 21BTC differs by securely storing underlying assets in cold storage, eliminating the necessity for a bridge.
Bitcoin wrappers, ERC-20 tokens backed by BTC, are generated on various blockchains and held by centralized custodians. Token redemption involves burning tokens for native BTC, while minting requires depositing Bitcoin to receive tokens.
In the wake of 21BTC’s debut, established Bitcoin wrapper WBTC has faced setbacks. With a $9 billion market capitalization, WBTC has come under scrutiny due to proposed control transfer plans to a joint venture involving BitGo and TRON founder Justin Sun. Community unease has led to initiatives like Sky (formerly MakerDAO) restricting borrowing against WBTC, resulting in diminished demand.
In response, competitors like Coinbase are eyeing BitGo’s dominance, with DeFi protocol Threshold suggesting a merger of its BTC token, tBTC, and WBTC to bolster the latter’s usage.
The impact of 21BTC’s launch on the Bitcoin wrapper market amid WBTC’s challenges is eagerly anticipated. This unfolding narrative may redefine the landscape of wrapped assets within the digital asset sphere.
