New years are often great occasions to launch new products. Popular crypto-exchange BTSE is the one to launch the latest product this year in the form of Wrapped Monero [WXMR], a Monero-backed token on Ethereum.
According to the announcement made by BTSE, WXMR will be backed 1:1 by Monero and secured by the exchange. Wrapped Monero will be similar to other synthetic tokens like Wrapped Bitcoin [WBTC] or Wrapped Ethereum [WETH]. As per the said announcement,
“Wrapped Monero brings greater liquidity to the Ethereum and DeFi ecosystem. It gives holders of Monero more flexibility to utilize their tokens without having to sell it for Ethereum or stablecoins, in order to access the many exciting opportunities in the DeFi space.”
The crypto-based synthetic asset aims to provide users exposure to a variety of different assets without needing to hold the underlying asset. For Monero, the times have been especially tough because many exchanges like Bittrex and Abra have delisted XMR, along with other privacy tokens, due to regulatory concerns.
With WXMR, users will be able to provide the necessary transparency. Wrapped Monero will have the same transparency as other ERC-20 tokens in the Ethereum blockchain, thus ensuring necessary regulatory clearance.
This was underlined by the Co-creator of Monero Ricardo Spagni via an offhand comment aimed at Bittrex, with Spagni asking,
— Riccardo Spagni (@fluffypony) January 6, 2021
On the contrary, fans of the digital asset did not appreciate WXMR, with one Twitter user @GumGumNoMi tweeting,
“That kinds of defeat the whole purpose & ”raison d’être” … doesn’t it ?”
Others questioned the listing of synthetic tokens while delisting crypto-tokens, with @coininthewoods commenting,
“I am curious, does an exchange listing wrapped tokens and not the native token actually get around regulations?”
While we won’t be able to figure out yet the take of regulators on synthetic tokens, exchanges and traders might find some use in the synthetic version of certain cryptos.