Wrapped Bitcoin (wBTC)

Wrapped Bitcoin (WBTC) converts Bitcoin into a form Ethereum's smart contracts can understand, bridging a blockchain that cannot run programmable code with an ecosystem built almost entirely around it.

WBTC is issued through a three-party system. A user sends BTC to an approved merchant, who performs identity and compliance checks before forwarding the funds to a custodian. Historically that custodian has been BitGo, which since an August 2024 restructuring shares control of the reserve with BiT Global under a 2-of-3 multisignature setup requiring signers from separate institutions. Once the custodian confirms receipt of the Bitcoin, it mints an equal amount of WBTC on Ethereum. Redeeming works in reverse: the WBTC is burned and the underlying BTC is released, keeping circulating supply matched 1:1 to reserves.

Governance sits with the WBTC DAO, a multisignature body of exchanges, protocols, and custodians that votes on adding or removing merchants and approving contract upgrades. Because every mint and burn is recorded on both chains and reserves are periodically checked, anyone can verify that circulating WBTC stays fully backed.

With billions of dollars in circulating value, WBTC remains the largest Bitcoin-backed asset used across DeFi lending, borrowing, and liquidity pools, though newer rivals like coinbase-custodied cbBTC and threshold-signed tBTC have chipped into its dominance. WBTC also carries a distinct trust model: unlike holding Bitcoin directly, it depends entirely on confidence in its custodian, a risk that became visible in 2024 when the custody change briefly caused some protocols to reassess their exposure.