TL;DR
- WBTC Native Expansion: BitGo Launches Wrapped Bitcoin on Avalanche and BNB Chain Using LayerZero’s Omnichain Fungible Token Standard.
- Decentralized Verifier Network: WBTC will feature a 1-of-2-of-3 setup, with BitGo as the primary verifier and LayerZero Labs and Polyhedra as optional verifiers.
- Controversial restructuring: BitGo will transfer control of WBTC to a joint venture with BiT Global and explore partnerships with the Tron ecosystem, raising transparency concerns.
Wrapped Bitcoin (WBTC) continues its expansion into the DeFi ecosystem with a significant technology upgrade: its deployment on Avalanche and BNB Chain using LayerZero‘s Omnichain Fungible Token (OFT) standard.
This advancement represents an important step towards native integration, eliminating the need for wrapped representations or synthetic assets that are often subject to additional risks.
🟠 @BitGo has selected LayerZero as the official interoperability provider for @WrappedBTC.
WBTC—a $9 billion asset and one of the most widely used tokens in crypto—is adopting the OFT Standard, securing its expansion to any of the 80+ blockchains LayerZero supports.
Today,… pic.twitter.com/eby4ROSUBH
— LayerZero (@LayerZero_Core) September 10, 2024
By operating natively on these new chains, WBTC ensures that users can move their Bitcoin value without the need for complicated exchanges, maintaining the integrity of the asset and reducing fragmentation in the ecosystem.
The transition to a native implementation also implies an improvement in transaction security.
WBTC will utilize a unique decentralized verifier network (DVN) setup that includes BitGo as the primary verifier.
This structure, which requires confirmation from BitGo and at least one of two optional verifiers (LayerZero Labs or Polyhedra), offers an additional layer of security by combining verification methods such as proof-of-authority and zk-proofing.
This combination ensures high protection against potential failures and compromises, ensuring that WBTC transfers are secure and reliable.
Impact on the DeFi Ecosystem and Controversies Associated with LayerZero
WBTC’s expansion to new chains not only expands its reach but also improves its functionality in the DeFi space.
WBTC users will be able to benefit from increased liquidity and interoperability opportunities without the need to manage wrapped representations, simplifying the use of the token across various platforms and networks.
However, the WBTC restructuring has also sparked controversy.
BitGo recently announced its intention to transfer control of the token to a joint venture with BiT Global and explore partnerships with the Tron ecosystem, which has raised concerns about the token’s transparency and governance.
The Web3 community has reacted with concern, especially regarding Justin Sun’s involvement and the potential impact on the trust and integrity of the token.
As BitGo moves forward with this transition, it is critical that it continues to evaluate and improve its validator network setup.
The introduction of new potential partners such as Lagrange and Axelar could offer additional opportunities to strengthen token security and interoperability in an ever-evolving DeFi environment.
