When working with wrapped Bitcoin, a tokenized version of Bitcoin that lives on the Ethereum network. Also known as WBTC, it lets you move Bitcoin value into smart contracts without leaving the blockchain. wrapped Bitcoin bridges the gap between the world’s biggest cryptocurrency and the fast, programmable environment of Ethereum.
At its core, Bitcoin, the original proof‑of‑work digital asset provides the underlying value that is locked in a custodial vault. A blockchain bridge, a set of smart contracts and custodians holds the real BTC and mints an equivalent amount of ERC‑20 tokens on Ethereum. This process creates the everyday relationship: Wrapped Bitcoin encompasses an ERC‑20 token version of Bitcoin. The resulting token follows the ERC‑20 standard, which means it can be stored in any Ethereum wallet, traded on DEXs, and used in DeFi protocols.
The token’s attributes are simple but powerful: each WBTC is 1:1 backed by real BTC, and redemption can happen at any time through the bridge. Because it’s an ERC‑20 token, DeFi platforms, lending, borrowing, and liquidity services on Ethereum can accept it as collateral, swap it for other assets, or earn yield. In practice, DeFi platforms leverage Wrapped Bitcoin for liquidity and traders gain exposure to Bitcoin’s price movements without dealing with slow Bitcoin‑only settlement times.
Understanding the tokenomics also helps: the total supply of WBTC always matches the amount of Bitcoin locked in the bridge. Custodians are audited, and any discrepancy would break the 1:1 peg, so trust is built on transparency and third‑party verification. Wrapped Bitcoin requires a blockchain bridge to lock original BTC, and that bridge’s security directly influences the token’s reliability. This connection also means that improvements in bridge technology—like multi‑sig custodians or decentralized verification—can boost confidence in WBTC across the ecosystem.
Why does this matter for you? If you want to earn yield on Bitcoin, participate in Ethereum‑based yield farms, or trade Bitcoin on faster, cheaper platforms, WBTC is the shortcut. It also opens doors to cross‑chain strategies, such as using Bitcoin’s price stability while experimenting with Ethereum’s composable smart contracts. Below you’ll find guides that break down how WBTC works, reviews of platforms that support it, and practical tips for safely using wrapped Bitcoin in your crypto journey.
Learn what renBTC is, how it wraps Bitcoin onto Ethereum, and how you can use it in DeFi. This guide covers minting, redemption, risks, fees, and future outlook.