21.co integrates Chainlink to enhance 21BTC transparency via real-time Proof-of-Reserves 21.co integrates Chainlink to enhance 21BTC transparency via real-time Proof-of-Reserves
Coinbase's wrapped Bitcoin product cbBTC continues to face significant challenges over its transparency.
2 min read
Updated: Sep. 24, 2024 at 4:19 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
21.co, the parent company of asset management firm 21Shares, has integrated Chainlink Proof of Reserve on the Ethereum and Solana mainnet to bolster transparency of its wrapped Bitcoin product, 21BTC, according to a Sept. 23 statement.
The company will use Chainlink’s Proof of Reserve through its digital asset platform, Onyx, to automate real-time reserve verification to ensure secure minting of 21BTC.
The firm said the integration will directly result in decentralized oversight and transparency, which will benefit users and increase confidence in the token. Users will be able to independently verify asset collateralization in real time.
21BTC was first launched on Solana in May and later on Ethereum in September. It is a fully backed token with 1:1 Bitcoin reserves held in cold storage.
Johann Eid, Chief Business Officer at Chainlink Labs, said:
“Proof of Reserve’s role in enabling a secure minting function is a key step to creating a reliable framework that allows for the tokenization of trillions of dollars in value.”
Coinbase rival’s challenges
While 21.co has focused on improving transparency for 21BTC, Coinbase’s wrapped Bitcoin (cbBTC) continues to face scrutiny.
On Sept. 23, 0xngmi, the founder of DeFillama, criticized Coinbase’s cbBTC’s lack of transparency. He said:
“Almost every single bridge (including WBTC) provides a Proof of Reserves so you can check that the issued coins are backed. But Coinbase doesn’t, cbBTC is way below the standard in terms of transparency.”
This comes as Coinbase’s Chief Legal Officer, Paul Grewal, also had to address concerns about cbBTC’s terms of service. Some X users had raised alarms that the exchange may not fully reimburse lost Bitcoin in cases of malicious activity or unforeseen events.
However, Grewal clarified that Coinbase’s liability only covers the Bitcoin lost. It does not extend to losses from trades or leveraged positions. He stated:
“It’s a limitation on liability that’s pretty basic: we aren’t liable for more than the BTC we lose. This language also makes clear the custodial relationship.”
Despite these concerns, cbBTC has gained traction, with nearly 3,000 tokens circulating within two weeks of its launch. It has quickly become the third-largest wrapped Bitcoin token, with a market capitalization of around $170 million and a trading volume that has surpassed $1 billion in the last 24 hours, according to Dune Analytics data.
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
$3,464.43
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Solana
$195.239
Solana is a high-performance blockchain platform that utilizes a unique consensus algorithm called “Proof of History” to achieve fast transaction speeds and low fees.
Chainlink
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Chainlink is a decentralized oracle network that connects smart contracts on the blockchain to real-world data.
21shares
21Shares is a Swiss provider of crypto- currency exchange-traded products (ETPs).
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.