Wrapped Bitcoin (wBTC) is a tokenized version of Bitcoin that exists on the Ethereum blockchain. By wrapping Bitcoin into an ERC-20 token, wBTC allows Bitcoin holders to participate in Ethereum's decentralized finance (DeFi) ecosystem without needing to sell their BTC. Each wBTC token is backed 1:1 by Bitcoin held in reserve by a custodian, ensuring that wBTC maintains parity with the value of Bitcoin. This bridge between Bitcoin and Ethereum enables BTC holders to access DeFi services, such as lending, borrowing, and trading on decentralized exchanges, that are otherwise unavailable to them on the Bitcoin network.
The process of creating wBTC involves wrapping Bitcoin through a custodial service and issuing the equivalent amount of wBTC tokens on the Ethereum blockchain. When a user wants to convert their wBTC back into Bitcoin, they can unwrap the token through the same custodian, reclaiming their BTC in exchange for burning the wBTC. This process is facilitated by smart contracts, ensuring transparency and security in the wrapping and unwrapping process. The use of trusted custodians ensures that the Bitcoin backing each wBTC token is securely held in reserve.
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On Plena Wallet, users can easily buy Wrapped Bitcoin (WBTC), allowing them to access the benefits of Bitcoin while interacting with decentralized finance (DeFi) applications on networks like Binance Smart Chain (BSC) and Polygon. By holding WBTC in Plena, users can leverage their Bitcoin in DeFi activities such as staking, yield farming, or providing liquidity in decentralized exchanges, all while maintaining the value equivalent to Bitcoin. Plena simplifies the process, offering secure and seamless access to WBTC.
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