Wrapped Bitcoin

Halal Rating :
Questionable
Last Price $97,756.66 Last updated:
Rank 10287
1D Change 4.09 %
Market Cap $13.0b
Circulating supply 133,016
Maximum supply None
Crypto Overview Crypto Impact

Crypto Overview

Categories
  • Medium of Exchange
  • DeFi
  • Wrapped Tokens
  • Fantom Ecosystem
  • Arbitrum Ecosystem
  • Moonriver Ecosystem
  • Optimism Ecosystem
  • Bitcoin Ecosystem

Overview

Wrapped Bitcoin (WBTC) is an ERC-20 token that represents Bitcoin (BTC) on the Ethereum blockchain. Each WBTC token is backed 1:1 by actual Bitcoin held in custody by BitGo, a regulated digital asset custodian.

Intended Utility

The primary purpose of WBTC is to bring Bitcoin's liquidity to the Ethereum ecosystem, enabling Bitcoin holders to participate in Ethereum-based decentralized finance (DeFi) applications. This allows Bitcoin holders to utilize their assets in various protocols while maintaining exposure to Bitcoin's value.

Actual Utility

WBTC is actively used across various DeFi protocols on Ethereum. As of 2024, WBTC has significant adoption with billions in total value locked (TVL) across different DeFi platforms. The token successfully fulfills its intended purpose of bringing Bitcoin liquidity to Ethereum.

Business Model Analysis

The WBTC protocol operates through a consortium of members including merchants and custodians. The process of minting and burning WBTC is fully transparent and verifiable on both the Bitcoin and Ethereum blockchains. The business model is straightforward and transparent, focusing on facilitating Bitcoin's use in the Ethereum ecosystem.

Token Distribution

WBTC's supply is entirely dependent on user demand and Bitcoin deposits. There was no initial token distribution to founders or early investors, as tokens are only minted when actual Bitcoin is deposited with the custodian. This eliminates concerns about founder enrichment through token sales.

Crypto Impact

To assign a comfort level investing in Wrapped Bitcoin from a halal perspective we need to determine whether it has a net positive or negative impact.

Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to Wrapped Bitcoin.

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