Wrapped Bitcoin (WBTC)

Wrapped Bitcoin (WBTC) is an ERC-20 token that represents Bitcoin on the Ethereum blockchain. Each WBTC token is backed 1:1 by actual Bitcoin (BTC), meaning that for every WBTC issued, an equivalent amount of BTC is held in reserve by a custodian. The concept behind WBTC is to bring the liquidity and value of Bitcoin into the Ethereum ecosystem, enabling BTC holders to interact with decentralized applications (dApps), DeFi protocols, and smart contracts on Ethereum without needing to sell their Bitcoin. WBTC allows Bitcoin holders to engage in DeFi activities such as yield farming, lending, and borrowing by using their BTC as collateral. The token is fully transparent, with on-chain proof of reserves showing that the issued WBTC is backed by the corresponding amount of BTC. This wrapping mechanism bridges the gap between the Bitcoin and Ethereum ecosystems, providing more flexibility for Bitcoin holders while leveraging Ethereum's broader ecosystem.