Charles Hoskinson Says Cardano Bitcoin (cBTC) Has Huge Potential for DeFi
Wrapped BTC ( wBTC ) has been available on Ether since 2019 and is a concept that was not invented by cBTC. The tokens are wrapped before they enter the Ethereum ecosystem. This means that they are first blocked on the Bitcoin network, and then released to be used on the Ethereum network.
Other blockchains and crypto projects also offer similar-wrapped tokens for other cryptocurrencies. Wrapped Tokens serve as a bridge for two cryptocurrencies, but provide little extra functionality.
Wrapped BTC is the decentralized autonomous organization that holds all wrapped BTC. The DAO makes sure that wrapped BTC is maintained at a 1:1 ratio to BTC. The DAO is continuously evolving and decentralized.
Crypto community members criticize the project, despite its success. After all, Bitcoin, decentralized Finance ( DeFi ), and decentralized should not need third parties to handle digital assets and transactions. Cardano BTC is a good example of how it can be used.
Charles Hoskinson reacts to Cardano bitcoin: Successful first tests
The wrapped BTC DAO aims to eliminate the need for third-party custody.
DeFi fans are ecstatic about cBTC, which does not use a middleman. Smart contracts, as well as a vault or’safe’ are used to store and manage BTC.
AnetaBTC released a demo app for the app in April 15th. On March 5th, 2023 AnetaBTC launched the cBTC. Cardano users could transfer Bitcoin into their ADA wallets using the app.
Charles Hoskinson, founder of Cardano, responded with a humorous meme.
Cardano users will be able to use the project, pending the successful completion of future tests, to access Bitcoin liquid. The cBTC Project has a lot of potential for the Cardano Ecosystem, given that Bitcoin’s current market cap is around half a billion dollars. BTC could be used by many decentralized applications and would benefit from its adoption.
But caution is advised. Token bridges, such as wrapped tokens, pose security risk.
AnetaBTC is committed to identifying and resolving security issues through the use of two independent auditors.
The project’s progress remains to be determined. It is a great opportunity to truly decentralize Cardano and DeFi.