Wrapped Bitcoin - a tokenized version of Bitcoin (BTC) that runs on the Ethereum (ETH) blockchain. WBTC complies with ERC-20, the core interoperability standard of the Ethereum blockchain, allowing it to be fully integrated into the ecosystem of decentralized exchanges, crypto lending services, prediction markets and other ERC-20-enabled decentralized finance (DeFi) applications.
Contents:
About Wrapped Bitcoin project
Wrapped Bitcoin is backed by Bitcoin at a 1:1 ratio through a network of automatically controlled merchants and custodians, ensuring that its price is always pegged to Bitcoin and allowing users to transfer liquidity between the BTC and ETH networks in a decentralized and autonomous manner. The modified bitcoin was first announced on October 26, 2018 and officially launched on January 31, 2019.
The Wrapped Tokens project, where WBTC is a part, was not founded by individuals, but rather by a joint project of three organizations:
| BitGo | BitGo is an institutional digital asset custody, trading and financial services firm. In addition to being one of the developers of WBTC, BitGo also acts as its original custodian, a blueprint that holds WBTC tokens and the keys, needed to mint them in large numbers. |
| Kyber Network | It is a blockchain-based liquidity protocol that allows integration of various cryptocurrency tokens and DeFi applications. Kyber Network has helped to create WBTC and still serves as a merchant on its network, an institution that mints and burns WBTC tokens to maintain a 1:1 token-to-BTC reserve ratio. |
| Ren | A company, specializing in cross-blockchain integration of cryptocurrency assets and DeFi applications, using solutions such as RenBridge, RenVM and others. It was founded in 2017 by Taiyang Zhang and Long Wang. |
WBTC tokens are protected by the parent blockchain on which they operate - Ethereum. In turn, ETH is protected by the Ethash proof-of-work feature, which is the Keccak family of hash functions.
Project benefits
Ethereum and products, derived from it, offer their users advanced financial tools such as lending and insurance that do not rely on trusted intermediaries. By “wrapping” BTC into the ERC-20 standard, WBTC enables the full integration of a bitcoin-like asset into this advanced financial decentralized application environment, bringing massive liquidity, associated with the BTC market. In addition, Wrapped Bitcoin makes things much easier for exchanges, wallets and payment services that work with Ethereum. Instead of running two separate nodes for the ETH and BTC networks, they can only support WBTC operations with an Ethereum node.
Where to buy tokens?
WBTC is automatically minted or burned whenever users buy or sell their tokens for bitcoin through a system of merchants and custodians. You can buy WBTC on several exchanges, both centralized and decentralized, that serve as merchants on the Wrapped Bitcoin network. Some of the main ones include:
- Uniswap;
- Binance;
- OKEx;
- Huobi Global;
- Kyber Network.
Since Wrapped Bitcoin is always backed by Bitcoin at a 1:1 ratio, the number of tokens in circulation is directly related to the amount of Bitcoin reserves in the WBTC network.