Chainlink has implemented its Proof of Reserve integration to ensure real-time transparency and security for 21.co’s Wrapped Bitcoin (21BTC) on both Solana and Ethereum. This integration sets a new standard for tokenized assets by guaranteeing 1:1 Bitcoin collateralization and avoiding the use of bridges through cold storage.
By utilizing Chainlink’s Proof of Reserve on both Solana and Ethereum, 21.co has enhanced the transparency of its Wrapped Bitcoin product, 21BTC. This move comes after Chainlink (LINK) and Bitcoin (BTC) experienced a decline as analysts predicted a 100X rally for Clandeno (CLD).
21BTC was launched on Solana in May 2024 and later expanded to Ethereum in collaboration with Flow Traders. This tokenized asset offers users peace of mind when engaging with decentralized applications. 21.co, the parent company of 21Shares, ensures real-time verification by fully collateralizing each 21BTC token with Bitcoin securely held in cold storage. This approach differs from traditional “lock-and-mint” methods, which can be susceptible to vulnerabilities. Instead, 21BTC utilizes cold storage and institutional-grade third-party custodians to safeguard assets.
By eliminating the need for bridges, this system provides an additional layer of security. Chainlink’s decentralized infrastructure, which manages over $15 trillion in transaction value, was selected for its seamless integration and reliability.
The integration of Chainlink also brings enhanced transparency and security to 21BTC. In a previous report by CNF, it was highlighted that Chainlink integration played a role in spot Bitcoin ETFs embracing transparency. With Chainlink, token minting only occurs when there are sufficient Bitcoin reserves available, preventing over-minting. Users can monitor the reserves in real time, which builds trust and confidence in the system. Eli Ndinga, Head of Strategy at 21.co, emphasized the importance of Proof of Reserve in providing transparency, highlighting that the same technology is used in their spot Bitcoin ETFs. Ndinga also noted that the partnership with Chainlink sets a new standard for tokenized products like 21BTC.
As of today, Chainlink (LINK) is trading at $11.46, experiencing a 0.07% increase in the past day and a 7.77% surge over the past week. Chainlink has recently expanded its strategic partnerships, contributing to the positive market conditions. These partnerships include Chainlink’s Proof of Reserve securing 21.co’s Wrapped Bitcoin on Solana and Ethereum, collaborations with Fireblocks for secure stablecoin issuance, and integration with Sony’s Soneium using Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to support blockchain growth across multiple chains.