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The Kraken crypto exchange has established its own token called Kraken Wrapped Bitcoin (kBTC). Individually kBTC is backed 1:1 by Bitcoin held at Kraken, a Wyoming financial chartered institution. These means that for per kBTC issued, there is a real Bitcoin stored by Kraken.

Each kBTC token is fully backed 1:1 by an equivalent amount of Bitcoin and held securely in Kraken’s custody.

According to the press release on Oct. 17, the token is built on the ERC-20 standard and designed to work on both the Ethereum network and OP Mainnet (formerly known as Optimism).

Kraken explained in a press release, “By kBTC, we’re bringing the strength of Bitcoin to new networks, hold up by the trust and security expert of Kraken has established the last decade.”

Moreover, the wrapped BTC will allow users to use their BTC in decentralized apps (DApps) that normally don’t support BTC.

Additionally, Kraken has taken a steps to ensure transparency. Kraken make the on-chain data available for public. People can check the kBTC reserves. They also view smart contracts for both Ethereum and OP Mainnet.

Kraken also refer that it hired a firm to audit the contract. Then the token successfully passed all the tests.

Wrapped coin like kBTC allow user to be used across multiple blockchains, improving in decentralized finance (DeFi). For example, kBTC can be used on ETH to trade, lend, or borrow BTC on various DeFi platforms.

At the time of launch, Kraken won’t support any of the spot markets for kBTC, but users will be able to redeem the kBTC token for actual Bitcoin at any time.

kBTC will be integrated into major decentralized finance (DeFi) platforms such as Yearn, Paraswap,Curve, and others. Additionally, Kraken set the lowest deposit for kBTC at 0.00026 BTC, which is around $15 at current prices.