Wrapped Bitcoin (WBTC) is a tokenized version of Bitcoin that exists on other blockchain networks, primarily Ethereum, as an ERC-20 token. It enables Bitcoin holders to interact with decentralized finance (DeFi) applications on Ethereum, such as lending, borrowing, and trading.

Security: Bitcoin relies on its decentralized proof-of-work (PoW) consensus. WBTC, however, inherits the security model of Ethereum (proof-of-stake since the Merge).

Decentralization: The wrapping process requires centralized custodians to hold BTC, introducing counterparty risk. This makes WBTC less decentralized than native Bitcoin.