LayerZero chosen as interoperability provider for BitGo’s WBTC
BitGo’s using a 1-2-of-3 decentralized verifier network involving LayerZero Labs and Polyhedra
LayerZero and Adobe stock modified by Blockworks
With LayerZero as its official interoperability provider, BitGo is expanding its tokenized wrapped bitcoin (WBTC) product to BNB Chain and Avalanche.
This effectively enables WBTC — one of the most widely used collaterals for DeFi — to be natively minted on the third and seventh largest chains by TVL without incurring additional bridging risks for users to move WBTC collateral from Ethereum.
BitGo’s expansion to BNB Chain and Avalanche is facilitated by LayerZero’s Omnichain Fungible Token (OFT) standard. It’s widely used today by over 100 protocols, including Ethena, Ether.fi and Swell.
LayerZero’s OFT standard enables the transfer of WBTC between BitGo-approved chains for the low cost of an omnichain message. It serves as a pseudo-global accounting standard that mitigates the traditional risks of double-spending or hacks with a third-party bridge.
To transfer WBTC, BitGo’s security configuration involves a 1-of-2-of-3 decentralized verifier network (DVN) to approve transfers. This includes BitGo’s DVN, LayerZero Labs’ DVN and Polyhedra’s zkLightClient.
This is not to be confused with BitGo’s recently changed 2-of-3 multi-signature security model that is required to mint or burn WBTC.
Read more: BitGo moves to allay fears over WBTC custodial changes
“WBTC is one of the largest assets in DeFi, and BitGo is one of the most trusted custodians in crypto — so this is definitely a standout example of what can be built on LayerZero,” Bryan Pellegrino, co-founder and CEO of LayerZero Labs told Blockworks.
“With BitGo running their own DVN, they have full control over the security of WBTC, which is exactly how it should be in crypto; that’s why we’re here. It’s all about teams owning their security and shipping cool stuff.”
LayerZero is the most adopted interoperability protocol today. Since 2021, LayerZero has facilitated 135 million omni messages and $50 billion in value across chains, a press release said.
BitGo’s WBTC is the most successful tokenized bitcoin collateral today, with 152,950 WBTC ($8.7 billion) issued across Ethereum alone.
Read more: Building a better wrapped bitcoin for DeFi
The WBTC issuer was embroiled in some controversy last month after it announced a change in corporate ownership that involved TRON founder Justin Sun.
Sky Protocol (previously Maker) immediately sought to delist WBTC collateralization from its DAI stablecoin following the announcement. Aave on the other hand, is adopting a wait-and-see approach, said Aave-Chan Initiative founder Marc Zeller on the Bell Curve podcast.
Updated September 10, 2024 at 4:20 pm ET: Clarified scope of BitGo’s decentralized verifier network.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: Unpacking crypto and the markets.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
