Wrapped Bitcoin /WBTC

What is Wrapped Bitcoin ( WBTC)?

Wrapped Bitcoin (WBTC) is an Ethereum-based token launched on October 26, 2018. It is an ERC-20 token designed to enable new application use cases for Bitcoin within the Ethereum Ecosystem. WBTC maintains a 1:1 ratio of Bitcoin, allowing BTC holders to participate in the Ethereum-decentralized finance ecosystem. 

As a digital asset, WBTC bridges the gap between Bitcoin and Ethereum blockchain networks, providing users with investment opportunities and liquidity while ensuring its value remains aligned with Bitcoin.

WBTC is the joint project of 3 organizations BitGo, Kyber Network, and Ren. WBTC was introduced in 2018 and officially launched in January 2019. 

How does it Work?

Minting WBTC: Merchants initiate transactions that authorize custodians to mint WBTC by providing Bitcoin. After receiving BTC, custodians wait for 6 block confirmations on the Bitcoin network. Once confirmed, they mint the equivalent amount of WBTC on Ethereum.

Burning WBTC: When merchants want to convert WBTC back to BTC, they create "burn" transactions through the WBTC smart contract. This process requires confirming 25 blocks on Ethereum. Once confirmed, the specified amount of WBTC is burned, and custodians send the equivalent BTC back to the merchant's address.

Atomic Swaps: For atomic swaps or transactions through a trusted exchange, users must undergo AML (Anti-Money Laundering) and KYC (Know Your Customer) procedures to ensure compliance and facilitate the transfer of BTC and WBTC.

WBTC History:

• Bitgo, Kyber Network, and Ren found WBTC to standardize bitcoins to ERC-20 tokens, allowing Ethereum's smart contract developers, Dexs orders, and parts of the Ethereum ecosystem exposure to Bitcoin’s liquidity by serving as a 1:1 pegged coin.

• In 2013, BitGo was co-founded by Mike Belshe, this is a financial firm for trading and custody.

• In 2017, Loi Luu, Victor Tran, and Yaron Velner established Kyber Network based in Singapore, a blockchain liquidity protocol to facilitate the blending of cryptocurrency tokens and dApps.It is responsible for minting and burning WBTC tokens to maintain a 1:1 ratio. RenBridge and RenVM components of the Ren company protocol also helped.

• WBTC Whitepaper released in January 2019, tokens were launched for Bitcoin-WBTC conversion in GOPAX, AirSwap, Dharma, Kyber Network, and ETHfinex.

• In August 2020, WBTC's market capitalization went up to $230 million.

• On October 14, 2020, CoinList set a new record for the largest mint of wrapped bitcoin in a single day, with 4,997 WBTC, worth $57.1 million at the time. This surpassed the previous record of 4,093 WBTC, worth $44.7 million, set by Alameda Research.

WBTC Price History:

• The price of WBTC is directly dependent on the Bitcoin price, there might be slight changes due to liquidity and demand on different platforms.

• Wrapped Bitcoin (WBTC) token price reached an all-time high of $ 99,442 on Nov 23, 2024, and an all-time low of $ 3,139.17 on Apr 2, 2019.

Where Can I Buy WBTC?

Wrapped tokens are only supported on Decentralized exchanges, the top popular WBTC exchanges include Uniswap, Curve, Aerodrome SlipStream, Aerodrome Finance, Woofi, and Dackieswap.

Wallets For WBTC?

Wrapped WBTC can be stored in a few best crypto wallets including Metamask, FIL Wallet, Halo Wallet, SafePal, Wirex Wallet, Ambire Wallet, Trust Wallet, imToken, and Torus.