Wrapped Bitcoin
Crypto Overview
Overview
Wrapped Bitcoin (WBTC) is an ERC-20 token that represents Bitcoin (BTC) on the Ethereum blockchain. Each WBTC 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 enable Bitcoin holders to participate in Ethereum's decentralized finance (DeFi) ecosystem while maintaining exposure to Bitcoin. This brings Bitcoin's liquidity to Ethereum's smart contract platform.
Business Model & Implementation
WBTC operates through a consortium of merchants and custodians. The process is fully transparent, with all Bitcoin reserves publicly verifiable on-chain. Users can mint WBTC by depositing BTC with a merchant, who works with a custodian to create the equivalent amount of WBTC.
Actual Usage & Adoption
WBTC has achieved significant adoption in the DeFi ecosystem, consistently ranking among the top ERC-20 tokens by market capitalization. It is widely used as collateral in lending protocols and for providing liquidity in decentralized exchanges.
Token Distribution & Governance
WBTC has no native token for governance or profit-sharing. The entire supply is backed by verifiable Bitcoin reserves. The project operates through the WBTC DAO, which consists of various ecosystem participants rather than a centralized founding team.
Technology Assessment
The protocol employs a transparent custody solution with regular proof-of-reserve attestations. All minting and burning operations are publicly verifiable on both Bitcoin and Ethereum blockchains.
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.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.