Wrapped Bitcoin is a tokenized version of Bitcoin (BTC) that runs on the Ethereum (ETH) blockchain.
WBTC is compliant with ERC-20 — the basic compatibility standard of the Ethereum blockchain — allowing it to be fully integrated into the latter’s ecosystem of decentralized exchanges, crypto lending services, prediction markets and other ERC-20-enabled decentralized finance (DeFi) applications.
WBTC is also backed by Bitcoin at a 1:1 ratio via a network of automatically monitored merchants and custodians, ensuring that its price is pegged to Bitcoin at all times and allows users to transfer liquidity between the BTC and the ETH networks in a decentralized and autonomous manner.
The listing of these new tokens is a testament to Coinbase Custody’s plans to provide support for more assets for the benefit of its over 300 institutional clients.
For the time being, the DEX industry is still in its infancy. Facilitating swaps of tokens on the same blockchain is possible, but the time has come to explore the next frontier in the form of cross-chain trading.
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