Review on Wrapped Bitcoin by Othere Obtentus
Bitcoin on Ethereum network
The crypto assets supported by the other assets are referred to as bundled tokens. On the Etherum blockchain, they are entirely developed. With the assistance of smart contracts, the worth is verified to be the same as its underlying properties. In real-time, it tracks its price. WBTC is a token in the Ethereum network representing BTC. It's a token from ERC-20. At a 1:1 ratio, each WBTC is completely backed by the BTC. WBTC 's primary aim is to move BTC 's security and liquidity to the Ethereum network. The WBTC adds increased liquidity, including decentralized exchanges (DEXs) and financial processes, to the Ethereum ecosystem. Most of the trading volume has recently taken place on centralized Bitcoin exchanges. In comparison, WBTC adds the value of Bitcoin to DEXs and makes it easy to use Bitcoin for token transactions.The wrapped BTC supplements the DeFi community with more BTC holders. This further leads to the growth of the Defi ecosystem. Users will benefit from Ethereum's programmability and low transaction costs, and have access to the increasing number of DeFi apps.
Pros
- Strong collaborations
- Greater liquidity to Ethereum ecosystem
- Completely backed by BTC at 1:1 ratio
- Supports and enhances the Defi community
Cons
- Counterparty risks
