Wrapped Bitcoin
WBTC is one of the top Market Cap coins around, what is it?
In short
WBTC is a version of BTC that exists as an Ethereum (ERC-20) token and can be swapped 1:1 for BTC
The token was created so that holders of BTC can interact with Ethereum's Decentralised Finance (Defi) ecosystem
Using a WBTC partner such as Airswap or DeversiFi, users can swap BTC for WBTC at a 1:1 ratio. This then allows them to interact with ERC-20 protocols. Bitcoin is still by far the most popular cryptocurrency, with over 45% of market dominance at time of writing. For all its strengths, the technology behind Bitcoin does not allow for smart contracts like other blockchains like Ethereum. Without smart contracts, there is no Defi ecosystem, and so WBTC gives users the best of both worlds. They can hold BTC, whilst also making the most out of their capital by putting their WBTC to work in the ERC-20 ecosystem.
Advantages
Allows BTC holders to benefit from ERC-20 Defi protcols
Allows Ethereum based Defi apps to benefit from the liquidity provided by BTC holders
WBTC undergoes regular audits and publishes all on-chain transactions and verifications for the Bitcoin and Ethereum networks
How do I buy WBTC
You can trade it on ERC20 compatible decentralised exchanges (DEXs) such as Kyber or Uniswap. If you want to swap BTC for WBTC, you can do so at a WBTC partner, which include Coinlist, Poloniex and Deversifi
What next? You've bought your WBTC, what can you do with it? Well WBTC can be used in DeFi activities such as lending, borrowing, token-swapping, yield farming and liquidity pools. Compatible platforms include Aave, Balancer, Compound, Kyber Network, MakerDAO and Uniswap.
Some suggested reading
pageBorrowing and Lending: CompoundLast updated
