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Wrapped Bitcoin (WBTC)
An ERC-20 Digital Asset Backed by Bitcoin in a 1:1 Fashion.
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Wrapped Bitcoin (WBTC) is an ERC-20 digital asset backed by Bitcoin (BTC) in a 1:1 fashion.
The digital asset functions with projects such as Kyber Network and REN being the Merchants who mint and burn WBTC tokens, and BitGo being the Custodian who holds BTC and the keys to mint WBTC tokens.
When a user wishes to exchange BTC for WBTC, he/she will be required the send his/her BTC to a Merchant. The Merchant will initiate a WBTC mint request and send the BTC from the user to the Custodian. The Custodian will then mint the corresponding WBTC, which will be subsequently transferred to the user via the Merchant.
When a user wishes to redeem his/her BTC with WBTC, the Merchant would communicate with the Custodian and transfer the user's BTC back to him/her, while the WBTC token will be burnt.
Contract changes and additions/removals of Custodians and Merchants are controlled by a multi-signature contract. Holders of the keys to the multi-sig contract are held by institutions as part of the WBTC DAO.