Introduction of LayerZero’s OFT Standard
Cryptocurrency custody platform BitGo has integrated LayerZero’s Omnichain Fungible Token (OFT) Standard for its Wrapped Bitcoin (WBTC). This move enables WBTC to function across multiple blockchain networks, enhancing its interoperability and accessibility.
Deployment on Avalanche and BNB Chain
As part of this rollout, BitGo is deploying WBTC on Avalanche and BNB Chain, with plans to extend support to additional blockchain networks in the future. Previously, WBTC was available on Ethereum, Base, Tron, and Polygon.
What is Wrapped Bitcoin (WBTC)?
Wrapped Bitcoin (WBTC) is a tokenized version of Bitcoin (BTC) that allows users to leverage BTC’s value within decentralized finance (DeFi) applications. Each WBTC token is backed 1:1 by Bitcoin, providing a bridge between traditional Bitcoin and the DeFi ecosystem. According to CoinGecko, WBTC’s market capitalization stood at $8.8 billion at the time of writing.
Benefits of LayerZero’s OFT Standard
LayerZero’s OFT Standard facilitates seamless operation of tokens across different blockchains. This standardized framework ensures that tokens can communicate uniformly across various networks, eliminating the need for complex bridges. For users, this means transferring WBTC between chains incurs only the cost of an omnichain message.
Ownership and Verification
BitGo will retain ownership of all WBTC contracts and manage the native deployment of WBTC. The token’s operations can now be extended to over 80 chains, with transactions verified through BitGo’s proprietary decentralized verifier network (DVN).
Recent Strategic Updates
This announcement follows BitGo’s recent transition to a multi-jurisdictional custodial structure. Previously based solely in the United States, BitGo now includes custodial operations in Hong Kong and Singapore. This strategic change aims to mitigate geographic risks but has raised concerns about additional risks due to involvement with third parties such as BiT Global and the Tron ecosystem.
Looking Ahead
In August, crypto exchange Coinbase hinted at the potential launch of its own wrapped Bitcoin token, referred to as “cbBTC.” This development highlights the growing interest and competition in the wrapped Bitcoin market.
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