Today, we're thrilled to announce that Wrapped.com, a collaboration between industry stalwarts Tokensoft and Anchorage, and specialists in wrapped crypto assets, will soon offer wrapped bitcoin on Stacks, or 'xBTC'. Wrapped Bitcoin on Stacks is a huge step toward native DeFi on Bitcoin. Because the Stacks 2.0 blockchain settles to Bitcoin in shared consensus already, xBTC will be the first wrapped asset actually backed by Bitcoin.
Tokensoft and Anchorage are trusted names in the crypto ecosystem and leaders in the wrapped asset space. With Tokensoft as the tech partner and Anchorage as the custodian, xBTC can immediately become one of the most useful assets, making open innovation on Bitcoin feasible for every developer.
To put it simply, wrapping assets immediately offers users and developers more utility. With xBTC, developers will have the security of Bitcoin along with general purpose smart contracts of Stacks, enabling them to quickly and easily build DeFi applications for the bitcoin ecosystem. xBTC can be redeemed for BTC at any time, otherwise funds are always stored with a qualified custodian (Anchorage).
Decentralized approaches to issuing wrapped BTC on Stacks are also possible, but the custodial approach with Wrapped.com offers an important service for institutions that prefer to use custodians.
What makes xBTC different? Bitcoin as the reserve asset:
xBTC is first asset that is secured by Bitcoin itself. Every xBTC token creation and transfer on Stacks 2.0 is secured by the Bitcoin blockchain. To change the history of asset definition or transfer, an attacker would need to attack Bitcoin itself. Contracts using XBTC can also monitor the state of the Bitcoin chain for example to verify BTC balances on any specific address on Bitcoin. STX will always be priced in BTC and the two blockchains can grow in harmony. In other words, there's no competition between the chains and can both succeed at their respective use cases. Putting trust in one isn't detracting from the other. Bitcoin rewards for network participants:
Through the Proof-of-Transfer consensus mechanism on the Stacks blockchain, STX holders can earn bitcoin rewards from the protocol for supporting consensus. STX has a native price pair with BTC and the BTC/STX trading pair is an important one for the Stacks ecosystem. xBTC opens the possibility for more decentralized ways of trading xBTC and STX and developers can do creative things in Clarity contracts once they have access to xBTC which is easily programmable in Clarity. xBTC is arguably one of the first assets pegged to BTC in this way and the first step toward building interesting things with Bitcoin as the base layer, like a DEX with BTC-only price pairs. Growing the Bitcoin ecosystem:
With xBTC there is no exiting to a fully new blockchain as with other wrapped assets. The Stacks blockchain operates in tandem with the Bitcoin blockchain, without changing or adding complexity to bitcoin. There is no risk of forking independently of each other. There's no need to trust a fully new blockchain with capital because Stacks is built with Bitcoin as a base layer and inherits the immutability of the Bitcoin blockchain. By bringing xBTC to Stacks, developers will be able to create interesting DeFi projects and apps for BTC holders by leveraging the scalability and security of Clarity smart contracts directly on Bitcoin.
This first iteration of xBTC will allow for new functionality on Stacks and presents unique opportunities for builders. xBTC is a necessary and exciting building block for developers that hope to build innovative products for the Bitcoin ecosystem, and we thank Tokensoft and Anchorage for laying this critical groundwork for the Stacks community. Interested parties can follow developments on Wrapped.com
and in Telegram
and join the Stacks Discord
Wrapped.com's support for xBTC was announced at the Stacks 2.0 launch event, and development is already underway. Users and developers can expect to utilize xBTC near the end of March 2021.