Recently, BitGo, which works with clients, partners, and regulators to “deliver innovative security, custody, and liquidity solutions”, introduced a new cryptocurrency that should be of great interest to $DOGE holders: Wrapped Dogecoin (wDoge) on Ethereum.
In a blog post published last Thursday (November 3), BitGo introduced wDoge, and here is what it had to say about it:
“The wDoge DAO is an initiative from BitGo, the Dogecoin Foundation, BluePepper, and the MyDoge wallet. BitGo brings our expertise from WBTC to the table, ensuring strong design and world class security. The DOGE ⇄ Ethereum bridge is no small undertaking.
“This project has been discussed for the better part of a decade with contributions from crypto trailblazers such as Ross Nicoll and Vitalik Buterin. With potentially billions of dollars of value to be bridged across the two chains, it’s important to get it right.
“As of the time of writing, Dogecoin is the 8th largest cryptocurrency with a total market capitalization of over $18 billion. Unlocking this value onto the Ethereum chain for use in DeFi and more gives DOGE holders the ultimate flexibility with your assets. Using the wDoge bridge, Dogecoin holders will be able to interact with decentralized applications on the Ethereum blockchain. Possibilities include lending, liquidity mining, voting on governance proposals, and more.“
BitGo then explain how wDoge works:
“All wDoge is backed by native DOGE at a 1:1 ratio. There are a number of important participants that are essential to the proper functioning of the DOGE ⇄ Ethereum bridge. The primary function of merchants is to distribute wDoge to users and communicate with the smart contracts that mint new wDoge and burn redeemed wDoge.
“Once a user indicates they would like to wrap their DOGE, merchants send the DOGE plus minting fees to the custodian. As in the case of WBTC, BitGo serves as the custodian for wDoge, safeguarding deposited funds using the security measures outlined above.
“When a user indicates that they would like to redeem their wDoge for native DOGE, the process is reversed. The merchant burns wDoge which triggers a request for the custodian (BitGo) to return DOGE to the merchant’s deposit address (less fees). BitGo initiates a withdrawal of DOGE to the merchant deposit address.“
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