Chainlink Proof of Reserve for its 21BTC on Solana and Ethereum

21Shares has announced that it has integrated Chainlink’s Proof of Reserve to increase the transparency of its Wrapped Bitcoin on Solana and Ethereum. 

Technically, the integration was carried out by 21.co, the parent company of 21Shares, within its digital asset management platform, Onyx, with the aim of automating real-time reserve verification and enabling the secure minting of 21BTC.

The Wrapped Bitcoin by 21Shares: 21BTC

Bitcoin exists solely on its native blockchain. 

In order to use BTC on other chains, it is necessary to create tokens that represent BTC on blockchains other than Bitcoin, called wrapped tokens. 

For this reason, the parent company of 21Shares, 21.co, has created its own wrapped token of Bitcoin, called 21BTC, which allows the indirect use of BTC on the blockchains of Solana and Ethereum.

These wrapped tokens to function correctly must always be fully redeemable at any time in real BTC on the blockchain of Bitcoin. Therefore, it is necessary that their manager keeps immobilized in reserve a number of BTC equal to the number of wrapped BTC issued, so as to be able to return them at any time to those who wish to make the exchange.

21Shares: the Proof of Reserve by Chainlink for 21BTC on Solana and Ethereum

Chainlink is one of the largest companies in the world that creates and manages crypto oracles.

It should be remembered that blockchains are in fact closed worlds, which are not capable of drawing data from the outside. Crypto oracles are precisely tools capable of bringing information from the outside into a blockchain. 

One of the services provided by the company is the Proof of Reserve.

It consists of providing public on-chain data related to digital assets held as a reserve. 

Thanks to Chainlink’s Proof of Reserve, it will be possible to verify in real-time how many real BTC 21.co holds in reserve for its wrapped Bitcoin 21BTC.

It is worth noting that Chainlink’s Proof of Reserve is on-chain, so its data can also be read by smart contracts and DeFi protocols in an automated manner.

Furthermore, it protects against potential harmful conii, incorporating cryptographic guarantees that the new minted tokens are backed by reserves.

It is ultimately a decentralized and transparent service, thus eliminating any potential central points of error, and allowing anyone to monitor in real-time. 

21Shares

21.co is the parent company of 21Shares, but it is less known than its subsidiary. 

21Shares, on the other hand, is well known in the crypto sector because it was one of the first companies in the world to introduce crypto ETPs on traditional exchanges, and because it has created the most. 

The company offers ETP crypto on traditional exchanges, while 21.co provides infrastructural technology on blockchain. The products of 21.co are based on its proprietary operating system, Onyx. 

21BTC di 21Shares: arriva la Proof of Reserve di Chainlink su Solana ed Ethereum

One of the crypto products launched by 21.co is precisely the wrapped Bitcoin 21BTC.

It was launched only in May of this year on Solana, in order to offer users of this blockchain the possibility to trade BTC on-chain through this wrapped token. In September, 21BTC was also launched on Ethereum through one of the largest market makers in the world, Flow Traders. 

21BTC was created by real and recognized financial institutions, such as 21Shares, but it is obviously aimed at the community that operates on-chain. Its goal is to be safe and to ensure the protection of users.

It is a native token on Solana and Ethereum, fully backed 1:1 by reserves in Bitcoin held in cold storage with institutional-grade custody. 

Thanks to Chainlink’s Proof of Reserve, it will be possible to have timely on-chain updates on the status of such reserves. This will give its users greater visibility and greater guarantees that 21BTC is fully guaranteed. 

The comments

The Head of Strategy and Business Development of Digital Assets at 21.co, Eliezer Ndinga, stated: 

“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.”

The Chief Business Officer of Chainlink Labs, Johann Eid, added: 

“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.”