Wrapped Bitcoin (WBTC) is a unique cryptocurrency that combines the valuation of Bitcoin with the versatility of Ethereum. Launched in January 2019, WBTC is an ERC-20 token on the Ethereum blockchain that represents Bitcoin. Each WBTC is backed 1:1 with Bitcoin, meaning that its value is directly pegged to the value of Bitcoin. The primary purpose of WBTC is to bring Bitcoin’s liquidity to the Ethereum ecosystem.By wrapping Bitcoin into an ERC-20 token, it allows Bitcoin to be used directly in Ethereum’s decentralized finance (DeFi) ecosystem. This includes lending, staking, and yield farming platforms, among others.
WBTC is created through a process called 'wrapping'. This involves locking up Bitcoin in a specific contract and then minting an equivalent amount of WBTC. The Bitcoin is held by a custodian, currently BitGo, and can be redeemed for WBTC at any time.
Above are only for introduction, not intended as investment advice.