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Wrapped Bitcoin bridges Bitcoin's value into Ethereum's DeFi ecosystem, enabling lending and yield opportunities.

Protocol Fundamentals
27 Jun 2026, 15:51 WIB
Crypto news
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Neutral
Wrapped Bitcoin bridges Bitcoin's value into Ethereum's DeFi ecosystem, enabling lending and yield opportunities.

Wrapped Bitcoin (WBTC) is an ERC-20 token on Ethereum backed 1:1 by real Bitcoin held by a custodian, allowing Bitcoin holders to use their assets within Ethereum's decentralized finance (DeFi) applications. Since Bitcoin cannot natively operate on Ethereum's smart contracts, WBTC acts as a bridge, enabling lending, borrowing, trading, and collateral use without selling Bitcoin. The mint-and-burn model involves custodians, merchants, and users, overseen by a decentralized autonomous organization (DAO), but WBTC carries additional risks like custodial and smart contract vulnerabilities. Alternatives like Coinbase's cbBTC and the decentralized tBTC offer different trust models, making the choice dependent on user preferences for custody and decentralization.

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