Wrapped Bitcoin
WBTC
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- Sep 11,2024MakerDAO discussed gradually reducing exposure to WBTC, signaling concerns from some DeFi protocols regarding changes in its custody structure.
- Aug 8,2024BitGo announced a partnership with Justin Sun and BiT Global to decentralize WBTC custody across multiple jurisdictions, enhancing transparency and decentralization of its custody.
- Apr 11,2023WBTC reached an all-time high price of $2.30, reflecting the strong demand for Bitcoin assets in the DeFi market.
- Dec,2022WBTC gained widespread adoption on Ethereum Layer 2 solutions like Optimism and Arbitrum, reducing transaction costs and increasing transaction speed.
- Mar,2022WBTC’s TVL in DeFi protocols grew to $8 billion, making it one of the largest and most popular wrapped Bitcoin assets in the market.
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WBTC (Wrapped Bitcoin) is an ERC-20 token launched in January 2019, designed to bring Bitcoin liquidity into Ethereum’s decentralized finance (DeFi) ecosystem. Each WBTC is backed 1:1 by Bitcoin, allowing users to participate in DeFi activities such as lending, staking, and yield farming on the Ethereum network while retaining the value of Bitcoin. WBTC is created through a "wrapping" process, where Bitcoin is locked in a custodian account (currently managed by BitGo) and an equivalent amount of WBTC is minted.
In 2024, WBTC's custodial structure underwent significant changes, sparking widespread attention in the crypto community. BitGo announced a partnership with Justin Sun (founder of Tron) and BiT Global, a Hong Kong-based firm, to decentralize WBTC’s custody across multiple jurisdictions, including Hong Kong and Singapore. This move aimed to enhance the decentralization of custody and reduce concentrated risks. However, due to Sun’s controversial history in the cryptocurrency space, this partnership raised concerns within the community. MakerDAO, a major DeFi protocol, voiced worries about Sun's involvement and discussed reducing its exposure to WBTC on its platform.
Despite these concerns, BitGo reassured the community that the security and transparency of WBTC remain unchanged, with key management procedures still in place to ensure that no single party has control over WBTC reserves. Justin Sun also clarified that his role is purely strategic, with no direct control over WBTC assets.
Although the 2024 custody changes have stirred controversy, particularly regarding Sun’s involvement, WBTC remains a crucial bridge between Bitcoin and Ethereum’s DeFi ecosystem. With the introduction of more decentralized custodial models, WBTC continues to offer users the opportunity to leverage their Bitcoin assets for smart contracts, decentralized lending, and staking. As the crypto landscape evolves, WBTC’s technical architecture and security are continually improving, providing users with more options in cross-chain applications. Looking ahead, innovations in decentralized custody and cross-chain applications are expected to further expand Bitcoin’s role within the Ethereum ecosystem.
Above are only for introduction, not intended as investment advice.
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Q&A about Wrapped Bitcoin Tokenomics
Explore the tokenomics of Wrapped Bitcoin (WBTC) and review the project details below.
What is the allocation for Wrapped Bitcoin (WBTC)?
WBTC does not have an initial allocation.
What is the supply schedule for Wrapped Bitcoin (WBTC)?
Wrapped Bitcoin (WBTC) does not have a specific supply schedule like Bitcoin. It is an ERC-20 token on the Ethereum blockchain that represents Bitcoin. Each WBTC is backed 1:1 with Bitcoin.
The supply of WBTC increases or decreases based on the demand for it. When someone wants more WBTC, they can send Bitcoin to the WBTC custodian, who then mints an equivalent amount of WBTC. Conversely, if someone wants to redeem their WBTC for Bitcoin, the custodian burns the WBTC and sends them the equivalent amount of Bitcoin. So, the supply of WBTC is not pre-determined or scheduled, but rather it is dynamic and changes based on the market demand.
To view real-time updates on token information, you can visit https://etherscan.io/token/0x2260fac5e5542a773aa44fbcfedf7c193bc2c599
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WBTC (Wrapped Bitcoin) is an ERC-20 token launched in January 2019, designed to bring Bitcoin liquidity into Ethereum’s decentralized finance (DeFi) ecosystem. Each WBTC is backed 1:1 by Bitcoin, allowing users to participate in DeFi activities such as lending, staking, and yield farming on the Ethereum network while retaining the value of Bitcoin. WBTC is created through a "wrapping" process, where Bitcoin is locked in a custodian account (currently managed by BitGo) and an equivalent amount of WBTC is minted.
In 2024, WBTC's custodial structure underwent significant changes, sparking widespread attention in the crypto community. BitGo announced a partnership with Justin Sun (founder of Tron) and BiT Global, a Hong Kong-based firm, to decentralize WBTC’s custody across multiple jurisdictions, including Hong Kong and Singapore. This move aimed to enhance the decentralization of custody and reduce concentrated risks. However, due to Sun’s controversial history in the cryptocurrency space, this partnership raised concerns within the community. MakerDAO, a major DeFi protocol, voiced worries about Sun's involvement and discussed reducing its exposure to WBTC on its platform.
Despite these concerns, BitGo reassured the community that the security and transparency of WBTC remain unchanged, with key management procedures still in place to ensure that no single party has control over WBTC reserves. Justin Sun also clarified that his role is purely strategic, with no direct control over WBTC assets.
Although the 2024 custody changes have stirred controversy, particularly regarding Sun’s involvement, WBTC remains a crucial bridge between Bitcoin and Ethereum’s DeFi ecosystem. With the introduction of more decentralized custodial models, WBTC continues to offer users the opportunity to leverage their Bitcoin assets for smart contracts, decentralized lending, and staking. As the crypto landscape evolves, WBTC’s technical architecture and security are continually improving, providing users with more options in cross-chain applications. Looking ahead, innovations in decentralized custody and cross-chain applications are expected to further expand Bitcoin’s role within the Ethereum ecosystem.
Above are only for introduction, not intended as investment advice.