Wrapped Bitcoin Quick overview

Introduction

Wrapped Bitcoin (WBTC) is a tokenized version of Bitcoin that runs on the Ethereum blockchain as an ERC-20 token. It was launched in January 2019 through a collaboration between BitGo, Kyber Network and Ren, with the goal of bringing Bitcoin's liquidity into the Ethereum ecosystem, including decentralized exchanges and DeFi lending protocols.

Each WBTC token is backed 1:1 by Bitcoin held in custody, primarily by BitGo. The reserves are publicly verifiable on-chain, and merchants who mint or burn WBTC go through a know-your-customer process managed by the WBTC DAO.

How WBTC Works

To create WBTC, a user sends real Bitcoin to a custodian, which locks the BTC and mints an equivalent amount of WBTC on Ethereum. The process can be reversed (burning WBTC to redeem the underlying BTC) through an authorized merchant. This wrapping mechanism lets Bitcoin holders use their BTC value inside Ethereum-based applications such as Uniswap, Aave, Compound and MakerDAO, without needing a separate Bitcoin-native DeFi ecosystem.

Where to Buy WBTC

WBTC can be acquired in two main ways: on decentralized exchanges (such as Uniswap or Curve) by swapping ETH, stablecoins or other ERC-20 tokens directly for WBTC, or on centralized cryptocurrency exchanges that list the token. Because WBTC is an ERC-20 token, it requires an Ethereum-compatible wallet (such as MetaMask) and ETH to cover gas fees when moving it on-chain.