About Wrapped Bitcoin (WBTC)
What Is Wrapped Bitcoin (WBTC)?
Wrapped Bitcoin is a tokenized representation of bitcoin used in DeFi. The WBTC system states that each token is backed 1:1 by BTC held in custody. WBTC lets applications use bitcoin-denominated liquidity where native BTC cannot directly run the same smart contracts.
How Does Wrapped Bitcoin Work and What Is WBTC Used For?
Approved merchants coordinate minting and redemption with custodians. Minting adds WBTC after BTC is received; redemption burns WBTC and releases BTC. Supply should therefore match custodied bitcoin. Proof-of-reserve pages allow users to compare onchain WBTC with custody addresses.
Wrapped Bitcoin Security, Custody and Risks
WBTC adds custody, merchant, governance, smart-contract, bridge, and regulatory risk to Bitcoin exposure. A 1:1 backing claim does not guarantee instant retail redemption or a constant market peg.
Frequently Asked Questions About Wrapped Bitcoin
Is WBTC native bitcoin?
No.
Can WBTC trade below BTC?
Yes.
What should users verify?
Chain, token contract, reserve data, and redemption rules.
Sources and Verification
Official sources
- WBTC Active
- Wrapped-token white paper Active