The DeFi niche is booming incredibly and it regularly reaches new heights. Today we will discuss the Wrapped Bitcoin token, which has gained support from the entire industry and is backed by multiple established partners such as Alameda Research, 0x, and Uniswap.
Until now we have either seen the fork(s) of BTC or the tokens based on ERC20 protocol, but WBTC possesses the power of Bitcoin while running on the Ethereum blockchain.
Sounds interesting, right? Well, keep reading…
Why Is It Growing?
WBTC runs on a 1:1 ratio with the BTC. As a result, it increases the liquidity of the Ethereum network and allows more functionality on the Ethereum network.
Its technical implementation also paves way for standardizing the BTC to ERC20 format. WBTC utilizes an innovating “burning” function for redeeming Bitcoin for WBTC tokens.
One of the primary reasons why it gained popularity is because WBTC is a result of the mutual efforts by the likes of BitGo and Kyber.
The WBTC project has also turned out to be a simplification tool for exchanges, limiting overall operational costs by linking the BTC and Ethereum networks.
Due to this fact (i.e. it reduces the overall operational costs) it provides a reason for many popular exchanges to list WBTC on their platforms.
WBTC has long-term prospects as well, as it would payments on Ethereum to also make use of BTC.
As such, the overall value of the Ethereum network can rise due to usage of BTC. This is due to how WBTC can multiplicatively increase the number of transactions on the Ethereum network.
So, this ‘uniqueness’ is the driving factor behind its high adoption rate and popularity in the crypto sphere.