Wrapped Bitcoin

Wrapped Bitcoin is an ERC-20 token that represents Bitcoin on the Ethereum blockchain. It is created by depositing actual Bitcoin into a secure vault managed by a custodian.

Once the Bitcoin is locked, an equivalent amount of Wrapped Bitcoin is minted on Ethereum. This allows Bitcoin holders to utilize their capital in decentralized applications, such as decentralized exchanges or lending platforms.

The peg is maintained through a transparent process of minting and burning tokens. Users can redeem their Wrapped Bitcoin for the underlying Bitcoin at any time.

This innovation effectively imports the liquidity of the largest cryptocurrency into the most active smart contract ecosystem. It is a foundational tool for yield generation strategies involving Bitcoin.