A new Tezos token called tzBTC brings Bitcoin (BTC) to the Tezos blockchain for the first time. The token was developed under the direction of the Tezos Foundation and the Bitcoin Association Switzerland. Bitcoin Suisse is also involved in the project.

tzBTC should combine the best of Tezos and Bitcoin

The liquidity of Bitcoins should be made usable for smart contracts on Tezos. The focus should be on applications in the area of ​​decentralized financial services (DeFi). tzBTC is a so-called wrapped asset and is covered by Bitcoin deposits. Customers receive the token from so-called gatekeepers. These include Bitcoin Suisse and Blockhain-Bank Signum. Similar to the USDT stablecoin, in which the supply is dynamically adjusted to demand, tzBTC is minted and burned as required.

Bitcoin as a Tezos token

The so-called keyholders take care of the storage of the BTC and the management of the circulating tzBTC quantity. These include the companies Taurus and Swiss Crypto Token. There is no limit to the number of keyholders. The wrapped asset follows the Tezos token standard FA1.2, which is comparable to the widely used ERC-20 standard from Ethereum.

No wonder: after all, ztBTC has only been live since April 8th. In addition, Tezos has to assert itself against Ethereum, the previous industry leader in DeFi. There are already several Bitcoin derivatives on Ethereum. Constructions such as the Wrapped Bitcoin ( WBTC ) enable Bitcoin to be integrated into Ethereum Smart Contracts.

Tezos against Goliath

Whether Ethereum remains the main breeding ground for the burgeoning DeFi landscape largely depends on a successful switch to proof-of-stake. Only then can Ethereum achieve its goal: To offer a scalable technological basis for DeFi and other blockchain-based applications as a distributed “world computer”. It is possible, given the troubled history of Ethereum that the top dog when switching to Proof of Stake gets stumbles. Then the hour may have come for Tezos and other potential “Ethereum killers”.

Until then, Tezos, with tzBTC and its broad support from the Swiss-based cryptocurrency companies, has at least a new shovel in the arsenal to one day dig Ethereum in the DeFi area.