Wrapped Bitcoin (WBTC) Beginner's Guide
WBTC is a tokenized Bitcoin backed by Bitcoin reserves at a 1: 1 ratio and usable on multiple smart-contract blockchains. It expands the use cases of BTC but also introduces risks such as custody, fees, and processing times.
WBTC What is
Wrapped Bitcoin (WBTC) is a tokenized version of Bitcoin, with each WBTC corresponding to one BTC. It allows Bitcoin's value to enter Ethereum,BNB Chain、Solana and other networks and be used in decentralized applications on those networks, without first exchanging BTC for other assets.
Wrapping and unwrapping
To obtain WBTC, users typically submit an application to an authorized merchant and pay BTC. After completing identity verification and anti-money-laundering procedures, the merchant notifies the custodian to verify the transaction and mint an equivalent amount of WBTC. To redeem it for BTC, the merchant first burns WBTC, after which the custodian releases the corresponding amount of Bitcoin.
Main uses and costs
WBTC can serve as collateral for lending and borrowing in DeFi apps or be added to liquidity pools to earn interest or rewards; some platforms also support its use for leveraged trading or governance activities. Transfers generally require payment of the network fee of the relevant blockchain, while wrapping and unwrapping may also incur merchant and custody fees.
Security mechanisms and limitations
Bitcoin reserves may be protected through cold storage and multisignature wallets. Supply, reserves, and minting and burning records can be queried publicly and are audited periodically by third parties. However, users still need to trust the custodian to safeguard BTC properly; operations may also be affected by fees, processing times, and network congestion.
Original Tutorial
https://www.binance.com/zh-CN/academy/articles/what-is-wrapped-bitcoin-wbtc
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