Wrap BTC.

To Wrap BTC means depositing native Bitcoin so it is held in reserve while a mirror token of equal value is minted on a smart-contract network such as Ethereum. The wrapped token is not a new asset with its own price; it is a claim on the BTC sitting behind it, and its price tracks Bitcoin because anyone holding enough of the token can redeem it for the real thing. This separation — Bitcoin stays where it is, a receipt moves instead — is a pattern documented on Wikipedia and is what lets Bitcoin's value participate in markets it was never built to run on.

A receipt, not a copy

The wrapped token is best understood as a claim rather than a duplicate of Bitcoin. Minting one does not create new Bitcoin supply; it moves existing BTC into a reserve and issues a tradeable receipt against it. Burning the receipt reverses the process and the underlying coin becomes spendable on the Bitcoin network again, visible on any Bitcoin block explorer.

Where the token can travel

Once minted, a wrapped BTC token behaves like any other ERC-20 asset. It can sit in a wallet, trade on an exchange, or be deposited into a lending market or liquidity pool, and its balance and transfers are visible on Etherscan the same way any other token's activity is.

Bitcoin's scripting language is deliberately limited; it was designed for secure, simple value transfer, not for the general computation that smart contracts need. Ethereum and other EVM chains run the lending, trading and yield contracts that make up most of DeFi, so an asset has to exist there natively to use them. You wrap BTC precisely to cross that gap — the coin itself never leaves the Bitcoin chain, but a token standing in for it becomes usable everywhere Ethereum contracts run. Holding Bitcoin exposure and earning on-chain yield used to be mutually exclusive choices; wrapping is the piece that removed that trade-off by giving Bitcoin a form a smart contract can actually hold, approve and move.

DeFi needs a programmable form

Supplying Bitcoin as collateral on a lending protocol, pairing it in a liquidity pool, or routing it through a decentralized exchange all require an asset that smart contracts can read and move. A wrapped token satisfies that requirement while keeping its value pegged to BTC, documented across trackers like DefiLlama.

Liquidity follows where the token lives

Most on-chain trading volume and the deepest DeFi liquidity sit on Ethereum and a handful of other EVM chains, not on the Bitcoin network itself. Wrapping gives Bitcoin holders access to that liquidity without selling their BTC exposure.

No native yield on Bitcoin itself

The Bitcoin network has no lending markets, no liquidity pools and no staking contracts built into its protocol, so BTC sitting in a cold wallet produces nothing on its own. Once you Wrap BTC, the resulting token can be supplied to a money market or paired in a pool, turning otherwise idle Bitcoin into collateral that earns while the underlying coin stays fully redeemable.

The original and still most-used way to Wrap BTC is the custodial model used by WBTC: a merchant takes your deposit request, a custodian holds the actual Bitcoin in cold storage, and the custodian instructs the smart contract to mint the matching token to your address. Redeeming runs the same path backward — you send the token to be burned, and the custodian releases the equivalent BTC. The system's trust rests on the custodian actually holding what it claims.

Mint and burn, not swap

Minting and burning are the two operations that keep the peg honest: new tokens appear only when new BTC enters the reserve, and tokens disappear only when BTC leaves it. There is no pool swapping one for the other behind the scenes — the WBTC network publishes the mint-and-burn transactions that back every token in circulation.

Proof of reserves

Because the peg depends on the custodian's holdings matching the token supply, reserve attestations and on-chain reserve addresses let anyone check that the BTC backing is real rather than assumed. Comparing the circulating supply against the published reserve address is the simplest independent check available to any holder.

The mechanics are consistent across custodial and decentralized routes, even though who holds the BTC differs. Here is the flow most providers follow.

• Choose a provider — a custodial service like WBTC or a decentralized protocol like tBTC — and connect a wallet that can receive an EVM token.
• Generate or confirm the dedicated Bitcoin deposit address the provider assigns to your request.
• Send BTC from your own wallet to that deposit address and wait for Bitcoin network confirmations.
• Once confirmations clear, the matching wrapped token is minted to your EVM address at a 1:1 rate.
• Use the token in DeFi, or later burn it through the same provider to redeem native BTC back to a Bitcoin address.

Not every way to Wrap BTC carries the same trust assumptions. The table below lines up the main routes against who holds custody, how trust is enforced, and what to check before relying on the peg.

Route	Custody model	What backs the peg
WBTC	Single custodian holds BTC	Reserve attestations and on-chain proof-of-reserve address
tBTC	Distributed signer network	Threshold cryptography across independent operators, no single custodian
Exchange-wrapped BTC	Exchange's own balance sheet	Exchange solvency and its own reserve reporting

A custodian is a single point of trust: if it fails or acts dishonestly, the peg can break. Decentralized alternatives such as tBTC spread custody across a distributed network of signers who collectively hold the keys to the deposited BTC, using threshold cryptography so no single party can move the reserve alone. The trade-off is usually a slower or more complex minting process in exchange for not depending on one institution's honesty and solvency.

Threshold signing instead of one key

Rather than one custodian's private key controlling the BTC reserve, a threshold scheme splits control across many independent operators, requiring a quorum of them to agree before funds move. Losing or compromising a single operator does not expose the reserve.

Permissionless minting

Decentralized wrapping protocols typically let anyone deposit and mint without approval from a merchant, closer to how the rest of DeFi is meant to work, though liquidity and integrations across exchanges and lending markets are still generally deeper for the established custodial token.

Choosing between the two models

Neither approach is strictly better in every case. A custodial token like WBTC tends to offer the deepest liquidity and the widest acceptance across lending markets and exchanges, which matters if you plan to move large amounts quickly. A distributed-signer wrap like tBTC trades some of that liquidity for not resting on a single institution's solvency, which matters more if you plan to hold the wrapped position for a long time. Many holders split a position across both rather than treating the choice as all-or-nothing.

Before trusting any wrapped token, verify the basics yourself rather than taking a provider's marketing at face value: confirm the token contract address against the provider's own documentation, check that circulating supply lines up with published reserves, and understand the exact redemption path before you need it. Unwrapping follows the same pattern everywhere — submit the token to be burned, specify a Bitcoin payout address, and wait for the provider to release native BTC once the burn is confirmed. Keep a record of which route you used, since a WBTC token and a tBTC token are not interchangeable even though both track Bitcoin's price, and either side of a transfer can still be traced on mempool.space or Etherscan.

Fees and timing to expect

Expect to pay Bitcoin network fees on the deposit side and Ethereum gas for the mint transaction, with the wrapped token usually landing within an hour once confirmations clear. Redemption runs on a similar clock: the burn transaction confirms quickly on the EVM side, then the Bitcoin payout follows once the provider's own confirmation threshold is met.

Reading the contract before you trust it

A wrapped token's safety rests on the contract and the reserve behind it, not on its ticker symbol alone. Matching the contract address on Etherscan against the provider's published address, and checking that the holder count and transfer history look like genuine activity rather than a copy, takes a few minutes and rules out an entire category of mistake before any BTC moves.