Curious about Wrapped Bitcoin? You're in the right place! This guide answers the question: What is Wrapped Bitcoin (WBTC)?

Understanding Wrapped Bitcoin: Bridging Bitcoin to Ethereum

Wrapped Bitcoin (WBTC) is an ERC-20 token that brings Bitcoin into the Ethereum ecosystem, allowing BTC holders to participate in decentralized finance (DeFi). Imagine being able to use your Bitcoin holdings within the diverse and innovative world of Ethereum's DeFi applications. That's precisely what WBTC allows.

Wrapped Bitcoin Explained: A 1:1 Peg to BTC

Wrapped Bitcoin is an ERC-20 token that runs on Ethereum and is backed 1:1 by Bitcoin. This means for every WBTC in circulation, there is a corresponding Bitcoin held in reserve, ensuring its value is pegged to Bitcoin. Think of it as a digital IOU for Bitcoin, redeemable for the real thing.

The Benefits of Wrapped Bitcoin: Enhanced Interoperability and DeFi Access

Wrapped crypto tokens are tokenized versions of different blockchain assets, pegged 1:1 to their original value. They enhance interoperability in DeFi... and WBTC is a prime example of this. By wrapping Bitcoin, users can unlock several key advantages:

• Access to DeFi: Participate in lending, borrowing, yield farming, and other DeFi activities on the Ethereum network using your Bitcoin.
• Increased Liquidity: Unlock liquidity by putting your Bitcoin to work in DeFi protocols.
• Faster Transactions: Benefit from Ethereum's faster transaction speeds compared to Bitcoin's network.
• Wider Range of Applications: Utilize Bitcoin in a broader spectrum of decentralized applications and platforms.

Learn More About Wrapped Bitcoin

Want to dive deeper? Learn how to wrap and unwrap BTC, the benefits and risks of wBTC, and how to utilize it within the DeFi landscape. While WBTC offers exciting opportunities, it's crucial to understand the underlying mechanisms and potential risks before engaging with it.

Is Wrapped Bitcoin Safe?

While WBTC is backed by a reputable custodian and undergoes regular audits, it's important to be aware of smart contract risks inherent in any DeFi platform. Always do your own research (DYOR) before investing.

We hope this explanation clarifies what Wrapped Bitcoin is and how it's revolutionizing the way Bitcoin can be used in the DeFi world. Date published: 29 de sept. de 2025, last updated: 14 de sept. de 2025 and 9 de sept. de 2025.