An analysis of Wrapped Bitcoin

Wrapped Bitcoin (WBTC) is an Ethereum token launched on Jan. 31 as an attempt to bring the liquidity effects of bitcoin (BTC) into the Ethereum ecosystem. WBTCs are backed 1-to-1 by BTC secured by centralized custodians.

WBTC’s token contract is governed by a multi-signature contract managed by a group including custodians that manage BTC to burn and mint WBTC and merchants who initiate burn/mint calls on behalf of users who want to trade in their BTC for WBTC, and vice-versa.