Wrapped Bitcoin (WBTC)

Wrapped Bitcoin (WBTC) is an ERC-20 token that represents Bitcoin (BTC) on the Ethereum blockchain, allowing bitcoin holders to bring its value into Ethereum’s smart contract ecosystem. Each WBTC is backed 1:1 by BTC held in custody, with reserves verifiable on-chain through a proof-of-reserve process. WBTC was launched in January 2019 as a joint effort by BitGo, Kyber Network, and Ren, and is now overseen by the WBTC DAO, a governance group with more than 30 members.

New WBTC is created when a merchant, typically an exchange or crypto business, deposits BTC with the custodian, which then mints an equivalent amount of WBTC on Ethereum; the token is destroyed (burned) when it is redeemed back for the underlying BTC. This custody role has historically been held by BitGo, with a 2024 transition involving BiT Global drawing scrutiny over centralization risk. WBTC’s main purpose is to let bitcoin liquidity flow into Ethereum-based decentralized finance, where it is used as collateral for loans, for liquidity provision, and for margin trading against ETH and other ERC-20 assets.