Arbitrum WBTC (WBTC)

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Use Cases of Arbitrum WBTC

• Trading and Liquidity: Arbitrum WBTC allows users to trade Bitcoin on the Arbitrum network, benefiting from faster and cheaper transactions compared to the Ethereum mainnet.
• DeFi Participation: It can be used as collateral or for lending, borrowing, and yield farming within decentralized finance (DeFi) apps on Arbitrum.
• Cross-Chain Transfers: Arbitrum WBTC enables Bitcoin holders to move their assets into the Arbitrum ecosystem, unlocking new opportunities without selling their BTC.
• Payments and Settlements: It can be used for quick payments and settlements within apps that support Arbitrum tokens, leveraging Bitcoin’s value with Arbitrum’s speed.

Pros of Arbitrum WBTC

• Interoperability: Allows Bitcoin to be used on Ethereum-based DeFi apps via Arbitrum’s Layer-2 network.
• Lower Fees: Transactions on Arbitrum are cheaper compared to Ethereum mainnet.
• Fast Transactions: Arbitrum’s rollup technology speeds up transaction times.
• High Liquidity: WBTC is widely accepted and easy to trade on many platforms.
• DeFi Access: Enables BTC holders to participate in lending, borrowing, and yield farming on Arbitrum.

Cons of Arbitrum WBTC

• Centralized Custody: WBTC depends on custodians like BitGo to hold the actual Bitcoin.
• Bridge Fees: Moving WBTC between Ethereum and Arbitrum can involve higher bridging fees.
• Trust Assumptions: Using the Arbitrum bridge requires trusting a centralized sequencer for transaction ordering.
• Complex Bridging: Sometimes WBTC cannot be bridged directly and requires going through approved merchants or exchanges.
• Exposure to Layer-2 Risks: WBTC on Arbitrum inherits risks related to the bridge and Layer-2 protocol operations.

Founders

Arbitrum WBTC was created by Offchain Labs. The founders of Offchain Labs are Ed Felten, Steven Goldfeder, and Harry Kalodner. They met at Princeton University and have backgrounds in computer science and blockchain technology.

Roles

• Ed Felten is a professor and former U.S. deputy Chief Technology Officer.
• Steven Goldfeder is the CEO of Offchain Labs.
• Harry Kalodner is the CTO and leads the engineering team.

Investors in Arbitrum WBTC

• Institutional Investors: Offchain Labs, the team behind Arbitrum, raised $120 million in a Series B funding round led by Lightspeed Venture Partners.
• Venture Capital Firms: Polychain Capital and Pantera Capital are notable backers.
• Individual Investors: Mark Cuban is among the prominent individual investors.
• Token Allocation: Investors hold about 17.53% of the total ARB token supply, which supports the Arbitrum ecosystem including Arbitrum WBTC.

These investors help support the development and growth of Arbitrum WBTC on the Arbitrum network.

Halal Status of Arbitrum WBTC

• Yes, Arbitrum WBTC is generally considered halal because it represents Bitcoin (WBTC) on the Ethereum blockchain with full backing and transparency.
• The token is backed 1:1 by actual Bitcoin held in custody, and all minting and burning operations are publicly verifiable.
• It enables participation in Ethereum's decentralized finance ecosystem without involving interest (riba) or excessive uncertainty (gharar), which aligns with Islamic finance principles.