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WBTC (Wrapped Bitcoin): What is it and how can I use it?

WBTC (Wrapped Bitcoin): What is it and how can I use it?

What is WBTC?


BitGo, Kyber Network, Ren, and other partners have collaborated to bring the liquidity of Bitcoin to the Ethereum network. The WBTC initiative is run by a DAO (decentralized autonomous organization) made up of sixteen established projects, including recognizable Open Finance names such as Dharma, Compound, MakerDAO, and Set Protocol. BitGo handles the initial custody, and Kyber and Ren supplied the initial liquidity by dipping into their own Bitcoin holdings.

Where is it going?

First announced on October 26, 2018, WBTC officially launched on the Ethereum mainnet on January 30, 2019.  The launch press release notes that all smart contracts have passed several security audits. Also, users can verify on-chain that the correct amount of Bitcoin reserves exists. It’s early days for WBTC, but people are optimistic that many new use cases will emerge now that the vast liquidity of Bitcoin can be leveraged on Ethereum.

How does it work?

One token corresponds to exactly one BTC. Users can swap their BTC for WBTC through any of eight initial merchants: Dharma, Kyber, Set Protocol, GOPAX, AirSwap, Prycto, Ren, and ETHfinex. To do so, the user must first undergo KYC/AML to verify his or her identity. Next, the merchant supplies bitcoin to the custodian (BitGo), who mints an equal amount of WBTC.  Also, merchants can redeem BTC by burning WBTC tokens. Traders who don’t want to go through the swapping process can buy it on numerous DEXes and centralized exchanges.

How can I use it?

Settle’s got you covered. You can find the best price for buying WBTC with DEX.AG. And once you’ve bought some, you can keep tabs on how it fits into your holdings with the most advanced portfolio tracking tool in crypto – Settle Portfolio.