21.co is Adding Chainlink’s Proof of Reserve
21.co, the holding company for cryptocurrency asset manager 21Shares, yesterday revealed that it will be incorporating Chainlink’s proof of reserve into its 21BTC product to address any potential concerns about the backing of the Bitcoin wrapper.
This addition to Ethereum and Solana networks will provide protection against fraudulent minting by embedding cryptographic guarantees that new tokens are backed by reserves, according to 21.co.
This decision comes after a wave of doubt among retail investors in the cryptocurrency market regarding the safety of Bitcoin wrappers such as Wrapped Bitcoin (WBTC) and Coinbase Wrapped BTC (cbBTC).
Chainlink’s proof of reserves uses automatic auditing of financial data, including off-chain reserve balances, and transmits this information to a blockchain-based smart contract in real-time.
