What is Wrapped Bitcoin?

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Wrapped Bitcoin (WBTC) is an Ethereum token intended to represent Bitcoin (BTC) on the Ethereum blockchain. It’s not Bitcoin, but rather a separate ERC-20 token intended to track the value of Bitcoin. WBTC was created to enable Bitcoin holders to participate in decentralised finance (‘DeFi’) applications that are common with Ethereum. With a WBTC buddy, 1 Bitcoin can be exchanged for 1 Wrapped Bitcoin, and vice versa. The BTC that supports WBTC is verifiable by means of a “proof of reserve” scheme that verifies the 1:1 backup between the minted WBTC tokens and the Bitcoin deposited by the custodians. The WBTC is maintained by a community called the WBTC DAO consisting of more than 30 members. It was started by BitGo, Ren, and Kyber.

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