Cryptocurrencies

Chainlink (LINK) secures 1 billion Wrapped Bitcoin (BTC) – Cryptocurrencies

Do Wrapped Bitcoins (wBTC) represent the future of Bitcoin (BTC) in DeFi fashion? The value of wBTC recently crossed the billion dollar mark.

Chainlink (LINK) contributes to the development of wBTCs, by putting its Proof-of-Reserve mechanism at its service.

An on-chain audit for wBTCs

The digital service provider, BitGo, announced on October 1 that the Proof-of-Reserve mechanism of Chainlink is now integrated into its platform to improve the transparency of the management of tokenized assets.

This feature allows applications based on Ethereum (ETH) automate the process of auditing wBTC without using the services of an external off-chain entity.

The process will therefore be standardized, carried out without a trusted intermediary and without the risk of censorship.

For BitGo, it is about strengthening the credibility and security of the tokenized asset of Bitcoin. To check wallet balances BitGo, a contract will access an oracle Chainlink decentralized every 10 minutes, which is the average time to create a block.

Avoid a 2008 bis thanks to the Proof-of-Reserve

The co-founder of Chainlink, Sergey nazarov, indicated to Forbes that the concept of Proof-of-Reserve enables proof of the condition of an underlying asset, which is fundamental for the proper functioning of financial systems.

Nazarov took the example of the 2008 financial crisis to illustrate his point: this crisis perfectly demonstrated the divergence between the real value of an asset and the market situation.

The collaboration between Chainlink and BitGo occurs when nearly 125,300 Bitcoins are tokenized on the network Ethereum : at the current price, these BTC would be valued at $ 1.33 billion.

The wBTC represent the majority of these assets, with a proportion of 76%. The interest of the holders of Bitcoins is undoubtedly linked to the development of DeFi protocols, in particular those which make it possible to invest their funds to be remunerated in interest.

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Bitcoin + Ethereum: wBTCs have enormous potential, the whole being greater than the sum of all of its parts. Ethereum is part of BTC Whales – far ahead of Lightning Network – Bitcoin could therefore benefit from the success of Ethereum 2.0 – hoping the pessimistic DeFi experts are wrong about the latter. DeFi is a legacy of Bitcoin – without whom we would not have a blockchain. Now it’s her turn to support the oldest crypto’s price explosion, a way to give her the lift.

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