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).
Anyone familiar with the cryptocurrency industry will know that the Decentralized Finance (DeFi) field is growing at a tremendous rate. In fact, during 2020, DeFi was one of the single hottest trends in the crypto world. DeFi is revolutionizing the financial industry, and it is all possible due to blockchain technology. The dominant platform when it comes to DeFi has always been Ethereum - however, there is no guarantee that Ethereum-based DeFi solutions and dApps will keep dominating this field.