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Wrapped Bitcoin (WBTC) is an ERC-20 token with a 1:1 peg to Bitcoin. This means that users can seamlessly convert their Bitcoin tokens to a wrapped version and use them on the Ethereum blockchain. In essence, WBTC succeeds in bringing the liquidity of Bitcoin over to the Ethereum network. So, why should you care? Well, if you’re a Bitcoin hodler, you can now put your BTC to work on Ethereum in places like decentralized finance (DeFi).
Being fully ERC-20 compliant means that WBTC can be integrated into decentralized exchanges (DEXs), lending protocols, prediction markets, and other decentralized applications (dApps). And since its value stays pegged to Bitcoin at all times, traditional Bitcoiners will no longer have to sell their stake for an unknown ERC-20 token that is prone to fluctuate.
The cryptocurrency sector is full of different coins, terms and concepts that can seem strange to a layman. However, there is no need to fret! Ivan on Tech Academy acts as your...