Wrapped Bitcoin, the crypto
Wrapped Bitcoin (WBTC) is a tokenized version of Bitcoin that runs on the Ethereum blockchain. WBTC is created through a process in which Bitcoin is locked in a smart contract, and a corresponding amount of WBTC is minted on the Ethereum blockchain. Each WBTC token represents one Bitcoin, and is fully backed by the Bitcoin held in custody.
The main point of Wrapped Bitcoin (WBTC) is to bring the liquidity and stability of Bitcoin to the Ethereum ecosystem, which is home to a variety of decentralized finance (DeFi) applications. By creating a tokenized version of Bitcoin that can be used on the Ethereum platform, WBTC enables new use cases for Bitcoin in the DeFi space, such as trading, lending, and borrowing, while still maintaining the underlying value and security of Bitcoin.
One problem that Wrapped Bitcoin (WBTC) tries to solve is the lack of interoperability between different blockchain networks. Bitcoin and Ethereum are two of the most popular blockchain networks, but they operate on different protocols and are not natively compatible. By creating a tokenized version of Bitcoin that runs on the Ethereum network, WBTC enables Bitcoin to be used in Ethereum-based applications and smart contracts, without requiring users to move their Bitcoin between different blockchains.
We used an AI to answer three questions about WBTC, so take this info with a grain of salt.