Layer-1 blockchain Nomic is set to introduce Ethereum support on its decentralized Bitcoin custody platform, launching on a testnet on September 12. This update will enable Nomic users to seamlessly move Bitcoin (BTC) on and off Ethereum without needing a centralized third-party custodian.
With this change, Nomic's native token, nBTC, can serve as an alternative to Wrapped Bitcoin (WBTC), which relies on reserves held by custodians.
nBTC offers a trust-minimized solution for integrating Bitcoin into decentralized finance (DeFi) and could eventually be used on other Ethereum Virtual Machine (EVM) compatible chains. Matt Bell, CEO of Turbofish and a core contributor to Nomic, commented: "Bitcoin is the highest-value crypto asset, and Ethereum is the highest-value DeFi ecosystem. It's time to move past the centralized and cumbersome BTC-on-Ethereum solutions and fully integrate Bitcoin into DeFi."
Bitcoin can be converted into nBTC, backed by Nomic's decentralized BTC reserves. As part of the Cosmos ecosystem, nBTC can be transferred across Cosmos chains or any chain supporting the Inter-Blockchain Communication (IBC) protocol.
Before nBTC, the primary alternatives to WBTC were limited. One option was tBTC, originally issued by the Keep Network, which used multiparty computation to secure assets through a network of signers. After Keep merged with NuCypher in 2022, they formed Threshold.
BitGo announced transferring WBTC custody to a joint venture with BiT Global in August, retaining its multi-signature security technology. The partnership sparked controversy due to Justin Sun's involvement.
Soon after, Threshold proposed transitioning WBTC's centralized mint-and-burn model to the permissionless mint-and-redeem mechanism used by tBTC, giving Threshold greater control over WBTC.
Another alternative was renBTC, issued by a platform managed by Alameda Research. However, that platform shut down following the collapse of FTX.
