21Shares Enhances Transparency with Chainlink’s Proof of Reserve 🛡️
21Shares has recently implemented Chainlink’s innovative Proof of Reserve feature, significantly bolstering the transparency of its Wrapped Bitcoin on both Solana and Ethereum. This advancement aims to enhance the security and reliability of the asset by automating real-time verification processes.
The integration was executed by 21.co, which serves as the parent organization of 21Shares. This initiative leverages the capabilities of its digital asset management infrastructure, Onyx, to facilitate secure minting and ensure that the reserves are accurately monitored in real-time.
Exploring 21BTC: Wrapped Bitcoin by 21Shares 🔍
Bitcoin operates exclusively on its original blockchain. In order to utilize Bitcoin on alternative chains, it’s necessary to create representations of BTC known as wrapped tokens.
The driving force behind this creation is 21.co, which has developed 21BTC, a wrapped Bitcoin token, enabling users to access BTC indirectly on the Solana and Ethereum networks.
To ensure the effectiveness of wrapped tokens, they must always be fully redeemable for actual BTC on the original blockchain. Consequently, the management entity must maintain a reserve of BTC equivalent to the number of wrapped tokens issued. This keeps the system prepared to fulfill exchanges whenever necessary.
Chainlink’s Proof of Reserve: A New Era for 21BTC 🔑
Chainlink stands out as a leading organization specializing in the development and management of crypto oracles.
It’s essential to understand that blockchains operate as isolated environments and usually cannot access external data. Crypto oracles serve the crucial role of conveying information from the outside world into these blockchain ecosystems.
One of Chainlink’s key offerings is the Proof of Reserve service, which provides publicly available on-chain data about the digital assets held in reserve.
This service allows real-time verification of the actual amount of Bitcoin that 21.co maintains as reserves for its wrapped Bitcoin, 21BTC. Importantly, the data sourced from Chainlink operates on-chain, which means it can be seamlessly accessed by smart contracts and decentralized finance (DeFi) protocols automatically.
This feature not only enhances transparency but also introduces cryptographic assurances, confirming that the newly minted tokens are indeed supported by sufficient reserves. The decentralized nature of this service minimizes risks associated with central error points and enables continuous monitoring.
A Deeper Look into 21Shares 🏦
While 21.co operates as the parent company of 21Shares, it’s 21Shares that has gained greater recognition in the crypto community.
Recognized for its pioneering efforts, 21Shares has introduced various crypto exchange-traded products (ETPs) on established marketplaces, leading the field in this domain.
21Shares provides ETPs on traditional exchanges, while 21.co focuses on the underlying blockchain infrastructure. Their products rely on the advanced operating system known as Onyx.
Launch of 21BTC: Proof of Reserve on Solana and Ethereum 🚀
One of the exciting offerings from 21.co is the wrapped Bitcoin, 21BTC, which was initially launched on Solana this year. This roll-out allows Solana users to trade Bitcoin on-chain using this wrapped token. Following this, 21BTC also debuted on Ethereum in September through collaboration with renowned market maker Flow Traders.
21BTC is engineered by established financial entities, including 21Shares, and is designed specifically for on-chain communities. It prioritizes security and aims to protect user interests.
This token is uniquely positioned on Solana and Ethereum, fully backed on a 1:1 basis by reserves of Bitcoin kept in secure, institutional-grade cold storage. The implementation of Chainlink’s Proof of Reserve provides users with timely updates regarding the status of reserves, increasing their confidence that 21BTC is thoroughly supported.
Industry Insights 📣
Eliezer Ndinga, the Head of Strategy and Business Development for Digital Assets at 21.co, remarked on the significance of Chainlink’s Proof of Reserve:
“The industry standard Chainlink Proof of Reserve is fundamental to ensuring the transparency of reserves supporting 21BTC, contributing to ensuring its minting function and supporting its widespread adoption in the Solana and Ethereum ecosystems. Thanks to the protection of the minting function and the timely and reliable monitoring of reserves, Proof of Reserve offers users greater assurances that 21BTC is fully backed by BTC 1:1.”
Johann Eid, The Chief Business Officer of Chainlink Labs, expressed enthusiasm regarding the integration:
“21Shares and Chainlink have played fundamentally important roles in ensuring the adoption of a more secure blockchain infrastructure, and we are excited to see 21Shares integrate Chainlink Proof of Reserve to support 21BTC. The role of Proof of Reserve in enabling a secure minting function is a fundamental step in creating a reliable framework that allows the tokenization of trillions of dollars of value.”
By
By
By
By