A new Tezos token called tzBTC brings Bitcoin (BTC) to the Tezos blockchain for the first time. The token was developed under the direction of the Tezos Foundation and the Bitcoin Association Switzerland. Bitcoin Suisse is also involved in the project.
tzBTC should combine the best of Tezos and Bitcoin: The liquidity of Bitcoins should be made usable for smart contracts on Tezos. The focus should be on applications in the area of decentralized financial services (DeFi). tzBTC is a so-called wrapped asset and covered by Bitcoin deposits.
Customers receive the token from so-called gatekeepers. These include Bitcoin Suisse and Blockhain-Bank Sygnum. Similar to the USDT stable coin, in which the supply is dynamically adjusted to demand, tzBTC are minted and burned as required.
Bitcoin as a Tezos token
The so-called keyholders take care of the storage of the BTC and the management of the circulating tzBTC quantity. These include the companies Taurus and Swiss Crypto Token. There is no limit to the number of keyholders.
The wrapped asset follows the Tezos token standard FA1.2, which is comparable to the widely used ERC-20 standard from Ethereum.
So far, the keyholders only manage a single Bitcoin.
The current keyholder wallets for tzBTC | Source: tzbtc.io
No wonder: after all, ztBTC has only been live since April 8th. In addition, Tezos has to assert itself against Ethereum, the previous industry leader in DeFi. There are already several Bitcoin derivatives on Ethereum. Constructions such as the Wrapped Bitcoin ( WBTC ) enable Bitcoin to be integrated into Ethereum Smart Contracts.
Tezos against Goliath
Whether Ethereum remains the main breeding ground for the burgeoning DeFi landscape largely depends on a successful switch to proof-of-stake. Only then can Ethereum achieve its goal: To offer a scalable technological basis for DeFi and other blockchain-based applications as a distributed “world computer”.
It is possible, given the troubled history of Ethereum that the top dog when switching to Proof of Stake gets stumble. Then the hour may have come for Tezos and other potential “Ethereum killers”.
Until then, Tezos, with tzBTC and its broad support from the Swiss-based cryptocurrency companies, has at least a new shovel in the arsenal to one day compete with Ethereum in the DeFi area.
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