Ethereum-Based “Synthetic Bitcoin” Offers Non-Custodial BTC Exposure
Synthetix, a decentralized synthetic asset platform, has launched the first of its kind synthetic Bitcoin on the Ethereum blockchain. This crypto (sBTC) will benefit Ethereum users by giving them non-custodial exposure to bitcoin. This according to a press release published on February 25, 2019.
Gain Control of Trustless Bitcoin
Satoshi Nakamoto’s vision of bitcoin largely revolved around the idea of the absence of a third-party custodian or institution to hold the digital currency. The ‘trustlessness’ so created ensures crystal clear transparency with regard to ownership of the underlying asset.
The release of synthetic Bitcoin offers the benefit of trustlessness to its holders in that it allows them to access bitcoin sans the hassles of owning a bitcoin wallet or holding it. Also, due to the fact that it’s built on the Ethereum blockchain, holders of the digital currency can use it within the Ethereum ecosystem for trading and other purposes.
In fact, the release of SBTC is accompanied by the release of an array of assets including silver and fiat currencies.
Users can trade these “synthetic assets” (called Synths) on Synthetix.Exchange. The exchange differs from other digital asset exchanges in that it gives users access to a wide range of assets without a counterparty. Synths are backed by cryptocurrency assets and enjoy a high degree of liquidity as they don’t require a third-party custodian to hold the underlying asset.
Kain Warwick stated that SBTC is just the beginning of exciting things to come from Synthetix. He said:
“Ethereum still doesn’t have a programmable synthetic Bitcoin as an ERC20 token without major liquidity restrictions or custodial risk, so sBTC is providing real utility. It’s an example of the benefits of the flexibility of a distributed collateral pool of cryptoassets, which will allow us to continue to offer new trading possibilities not offered anywhere else.”
Improved Liquidity and Trading Options
Synthetix’s sBTC is not the first time an iteration of bitcoin has been launched on the Ethereum blockchain.
BTCManager reported on October 29, 2018, how BitGo announced the launch of Wrapped Bitcoin (WBTC). WBTC is an ERC20-compliant digital token built on the Ethereum blockchain which provides users the benefits of enhanced liquidity and secure collateralization on a one-to-one basis with bitcoin.
The token went live on the Ethereum blockchain on January 31, 2019.