Can you trust a wrapped Bitcoin?
Asked 3 years ago
Hello, what is a wrapped BTC about? It's the first time I'm coming across something like this. What can I do with it, can you unwrap it? Lastly, do you see wrapped Bitcoin as a good investment?
Philip Burns
Monday, April 25, 2022
Wrapped bitcoin (wBTC) is an Ethereum-based token (ERC-20) directly created from bitcoin (BTC) in a 1:1 ratio. The main benefit of wrapped bitcoin is its seamless integration with Ethereum applications, such as wallets, dApps, and DeFi protocols. This means that wrapped bitcoin holders can participate in lending, borrowing, yield farming, margin trading, and other DeFi activities. To purchase wBTC, you make a request to a merchant like Airswap, Ox, Aave, or Maker. Furthermore, converting BTC into wBTC is cost free. However, you will incur a small fee when converting wBTC into BTC. You will also be charged Ethereum gas fees when transacting with wBTC.
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