Take a Bitcoin, depart it in custody, ‘wrap’ to symbolize it as an Ethereum-based token, and retain a peg to Bitcoin’s worth – et voila, you will have created Wrapped Bitcoin! In short, WBTC is an Ethereum ERC-20 token tied to BTC’s worth, much like the Tether token tied to USD’s worth.
The principle cause to take action, is to ‘shift’ liquidity from Bitcoin’s networks to the Ethereum blockchain, and participate in DeFi providers that will not in any other case be natively obtainable to Bitcoin holders. DeFi providers for WBTC embody options like buying and selling, staking, margin buying and selling, lending and borrowing, video games, DApps and good contracts.
There isn’t any most restrict to WBTC, and transactions full 40 instances quicker than often seen with BTC. Amongst its backers, BitGo and Kyber Community declare to take care of a 1:1 ratio of WBTC tokens to BTC reserves, and would stay the centralised custodian of BTC.