21.co and Ripple, two prominent players in the cryptocurrency space, are making significant strides in enhancing blockchain interoperability and functionality. 21.co, the parent company of 21Shares, has launched its own Bitcoin wrapper, 21BTC, on the Ethereum network, expanding its suite of wrapped tokens to include Bitcoin alongside Avalanche, Polkadot, and Solana. Meanwhile, Ripple is integrating Ethereum-compatible smart contracts into the XRP Ledger through a new sidechain, broadening the utility of the XRP ecosystem to support more complex applications.
Ripple’s Ambitious Leap: Integrating Ethereum-Compatible Smart Contracts into XRP Ledger
Ripple is making a significant leap in enhancing the XRP Ledger (XRPL) by integrating Ethereum-compatible smart contracts through a newly developed sidechain. This bold move aims to expand XRPL's functionality far beyond basic transactions, allowing it to support more complex applications like decentralized exchanges (DEXs) and token issuance. The introduction of this sidechain is set to transform the XRP ecosystem, making it more versatile and appealing to a broader developer community.
The XRP Ledger, known for its speed and efficiency in processing financial transactions, is now set to evolve into a more comprehensive blockchain platform. By integrating Ethereum-compatible smart contracts, Ripple is positioning XRPL as a formidable player in the blockchain space, capable of supporting decentralized applications (dApps) and enabling more advanced use cases.
Smart contracts, which are self-executing programs that automatically enforce the terms of a contract, have revolutionized the blockchain industry by enabling a wide range of functionalities beyond simple peer-to-peer transactions. These contracts can facilitate complex operations such as token issuance, decentralized trading, and the creation of decentralized financial (DeFi) applications. By bringing this functionality to XRPL, Ripple is unlocking new potential for the network, allowing it to compete with other leading blockchain platforms like Ethereum.
The cornerstone of this development is the XRPL EVM sidechain, which will bring Ethereum Virtual Machine (EVM) compatibility to the XRP community. The EVM is the software environment that runs smart contracts on Ethereum, and by making XRPL compatible with EVM, Ripple is enabling developers to deploy Ethereum-based smart contracts on the XRP Ledger. This cross-chain functionality is expected to attract Ethereum developers to the XRP ecosystem, as they can now use familiar tools and programming languages to build on XRPL.
The XRPL EVM sidechain will utilize the Axelar network, a crypto bridging service that allows for seamless cross-chain token transfers. With Axelar's support, users will be able to move tokens between the XRPL EVM sidechain and 55 other blockchains, significantly enhancing interoperability. Wrapped XRP (eXRP), a representation of XRP on other networks, will serve as the native asset and gas token on this sidechain, facilitating transactions and powering smart contracts.
Wrapped XRP (eXRP) plays a crucial role in this new sidechain. As the native asset on the XRPL EVM sidechain, eXRP will be used for paying transaction fees and executing smart contracts. This wrapped token is essentially XRP that has been converted to a format compatible with other blockchains, enabling it to operate across different networks. The introduction of eXRP is a strategic move by Ripple to ensure that the XRP token remains central to the ecosystem, even as it expands into new territories.
A Unified Blockchain Ecosystem
Ripple's decision to integrate Ethereum-compatible smart contracts via the XRPL EVM sidechain is part of a broader strategic vision to unify the blockchain ecosystem. By bridging the gap between XRP and Ethereum, Ripple is creating new opportunities for collaboration and innovation. This move is expected to attract developers who have previously focused on Ethereum, offering them a new, highly efficient platform to build on.
Moreover, this development is likely to have a positive impact on the XRP token itself. As the XRPL EVM sidechain gains traction and more developers begin building on the platform, the demand for XRP is expected to increase, potentially driving up its value. This could be a significant boost for XRP, which has seen its price fluctuate over the years amid regulatory challenges and market volatility.
21.co Expands Wrapped Token Offerings with Launch of 21BTC on Ethereum
21.co, the parent company of cryptocurrency asset manager 21Shares, has announced the launch of its own Bitcoin wrapper—21.co Wrapped Bitcoin (21BTC)—on the Ethereum blockchain. This development, announced on Sept. 3, marks a significant expansion of 21.co’s suite of wrapped tokens, which already includes wrapped versions of Avalanche (AVAX), Polkadot (DOT), and Solana (SOL) on the Ethereum network.
The launch of 21BTC on Ethereum is a strategic move by 21.co, building on its earlier success with the token on the Solana network, where it was first introduced in May. By extending 21BTC to Ethereum, the company is positioning itself to leverage the network's vast user base and robust decentralized finance (DeFi) ecosystem. Ethereum, as the largest smart contract platform, offers a wide range of financial activities, from lending and borrowing to trading and yield farming, all of which can benefit from the addition of 21BTC.
Eliézer Ndinga, 21.co’s head of strategy and business development for digital assets, emphasized the company's commitment to bringing “stringent asset management best practices” to the world of wrapped assets. This includes the use of institutional-grade custodians and advanced security protocols to protect users’ investments. In a market where security is paramount, 21.co’s focus on rigorous asset management could set 21BTC apart from its competitors.
One of the key features of 21BTC is the strong emphasis on user protections. 21.co has partnered with regulated third-party custodians to ensure that the Bitcoin backing 21BTC is securely stored in cold storage—one of the most secure methods of protecting digital assets from hacking and theft. This focus on security is crucial, especially in the world of wrapped assets, where the underlying collateral must be safeguarded to maintain the integrity of the token.
In addition to secure storage, 21.co has teamed up with Flow Trader, a prominent market maker, to manage the issuance of 21BTC. Michael Lie, Flow Trader’s global head of digital assets, highlighted the importance of wrapped BTC in the DeFi ecosystem, noting that it acts “as a critical source of collateral” and enables a wide range of financial activities. By collaborating with Flow Trader, 21.co is ensuring that 21BTC will have the liquidity and market support needed to succeed in the competitive DeFi landscape.
The launch of 21BTC comes at a time when the most popular Bitcoin wrapper, Wrapped Bitcoin (wBTC), is facing backlash over its custodian, BitGo's, planned partnership with BiT Global, a Hong Kong-based crypto exchange. This partnership would grant BiT Global partial custody of the Bitcoin backing wBTC, a move that has sparked controversy within the crypto community.
The involvement of Justin Sun, a prominent figure in the crypto space known for his aggressive marketing tactics and controversial projects, has further fueled concerns. The DeFi protocol Threshold recently expressed these concerns in an Aug. 29 governance proposal, warning that Sun’s affiliated projects show “worrying signs of possible misappropriation” of collateral.
In contrast to the uncertainty surrounding wBTC, 21.co’s 21BTC is being marketed as a more secure and reliable alternative, backed by stringent asset management practices and trusted custodians. While wBTC currently holds a dominant position in the market with nearly $9 billion in market capitalization, 21.co is betting that its focus on security and institutional-grade practices will attract users looking for a safer option.
The launch of 21BTC on Ethereum is part of 21.co’s broader vision of enhancing liquidity and interoperability across multiple blockchain networks. Wrapped tokens like 21BTC are essential for bridging assets between different blockchains, enabling users to leverage the unique advantages of each network. For example, while Ethereum is known for its extensive DeFi ecosystem, other networks like Solana offer faster transaction speeds and lower fees.
By offering wrapped versions of Bitcoin, Avalanche, Polkadot, and Solana on Ethereum, 21.co is creating a more interconnected blockchain ecosystem where assets can flow freely between networks. This interoperability is crucial for the future of DeFi, as it allows users to maximize the utility of their assets and participate in a wider range of financial activities.
21Shares: A Leader in Cryptocurrency ETFs
21.co is best known for its subsidiary 21Shares, which is a leading issuer of cryptocurrency exchange-traded funds (ETFs). 21Shares offers a range of ETFs that provide investors with exposure to various cryptocurrencies, including the ARK 21Shares Bitcoin ETF (ARKB) and the 21Shares Core Ethereum ETF (CETH). These ETFs have gained popularity among institutional investors and retail traders alike, further establishing 21.co as a key player in the digital asset space.
The launch of 21BTC is a natural extension of 21.co’s expertise in managing crypto assets. By offering a Bitcoin wrapper on Ethereum, the company is catering to the growing demand for secure, interoperable tokens that can be used in a variety of DeFi applications.
21.co’s introduction of 21BTC on Ethereum represents a significant development in the wrapped Bitcoin market. With its emphasis on stringent asset management, user protections, and interoperability, 21BTC is poised to challenge the dominance of wBTC and attract users looking for a secure and reliable alternative.
As the DeFi ecosystem continues to grow, the demand for wrapped assets like 21BTC is likely to increase, providing 21.co with new opportunities to expand its presence in the digital asset space. Whether 21BTC can dethrone wBTC as the leading Bitcoin wrapper remains to be seen, but one thing is clear: 21.co is making a strong case for its place in the competitive world of wrapped tokens.
