This is our series of short articles called “What’s on weiDex” focused on the tokens which are already listed on our exchange. The idea is to give you more information about each of the tokens which we offer. We will explain more about their use and the aim of the projects which they stand for.
This week we are talking about Wrapped BTC.
- About the project
WBTC is here with one mission — to make Bitcoin compatible with the Ethereum chain. In other words Wrapped Bitcoin is the first ERC20 token backed 1:1 with Bitcoin. WBTC standardizes Bitcoin to the ERC20 format, creating smart contracts for Bitcoin. This makes it easier to write smart contracts that integrate Bitcoin transfers. The Ethereum network processes transactions faster than the Bitcoin network and by using WBTC, users can move Bitcoin between exchanges much faster.
2. Main features
- WBTC uses a Proof-of-Reserve consensus mechanism which is similar to the “stable coin” conception — pegged 1-to-1 with BTC.
- WBTC combines the liquidity and public awareness of Bitcoin with the developer ecosystem of Ethereum or said in other words — it brings the functionalities of the Ethereum network to the most dominant cryptocurrency on the market — Bitcoin. Hence, WBTC expands the usage of BTC into areas like exchanges, loans, and token payments.
- WBTC is a DAO project — the network is governed by multi-sig contracts that require signatures from the DAO members before a new individual is allowed to join or leave the governing body.
3. What can the WBTC token be used for?
In the most popular case, you buy WBTC when you want to use a token with Bitcoin’s value in Ethereum smart contracts.
WBTC resembles a great extent to the so-called “atomic swaps” where you exchange tokens between different blockchains e.g. the Bitcoin and the Ethereum blockchain. This way you are able to pay for things that are denominated in the ERC-20 token with Bitcoin, and vice versa.
At the same time, you benefit from the main advantages of the Ethereum blockchain — faster transaction times (blocks on the Ethereum network are confirmed in about 15 seconds, whereas Bitcoin’s block confirmation time lasts for about 10 minutes), lower transaction fees, more advanced smart contract capabilities.
Moreover, you no longer have to convert from Bitcoin to Ethereum in order to use any DApps or decentralized exchanges.
If you are building on Ethereum, you can now create a smart contract on Ethereum that pays out in Bitcoin — because WBTC can be redeemed for Bitcoin at any time.
Website: https://www.wbtc.network/
Whitepaper: https://www.wbtc.network/assets/wrapped-tokens-whitepaper.pdf
CoinMarketCap: https://coinmarketcap.com/currencies/wrapped-bitcoin/
