Summary:
WBTC is the largest wrapped token, allowing Bitcoin holders to engage in Ethereum's DeFi.
tBTC offers a decentralized alternative with a TVL of $193.51 million.
renBTC ensures a 1:1 peg to Bitcoin and has a TVL of $23.48 million.
dlcBTC utilizes discrete log contracts for enhanced security and control.
cbBTC launched by Coinbase, simplifies minting and redemption processes.
Several WBTC alternatives have emerged to bring Bitcoin liquidity to DeFi ecosystems across the cryptoverse. This guide explores the most prominent ones.
What Is Wrapped Bitcoin (WBTC)?
Wrapped Bitcoin (WBTC) is an ERC-20 token backed 1:1 by Bitcoin. Launched to allow decentralized apps (dApps) on Ethereum to access Bitcoin, it adds liquidity to the Ethereum ecosystem, enabling BTC holders to engage with DeFi.
To convert BTC to WBTC, send it to a custodian or merchant who manages the minting and burning process. WBTC has expanded beyond Ethereum to several other blockchains, enhancing Bitcoin’s presence in the DeFi space.
WBTC Alternatives You Should Know
WBTC has paved the way for other tokens backed 1:1 by BTC, facilitating broader use cases for Bitcoin. Here’s a list of WBTC alternatives:
| Wrapped Bitcoin | Year of Launch | Founding Company | Minting Mechanism | Redemption Mechanism | Custodianship | Decentralization | Total Locked Value (TVL) | |----------------|----------------|------------------|-------------------|---------------------|----------------|-----------------|--------------------------| | WBTC | 2019 | BitGo, Kyber, Ren| Mint and Lock | Atomic swaps | Institutional custody managed by BitGo | Centralization risks exist | $8.67 billion | | tBTC | 2020 | Threshold Company | Optimistic Minting | Multi-step validation and burning | Community of nodes manage BTC custody | Achieves decentralization through nodes and staking | $193.51 million | | renBTC | 2020 | Ren | Lock and Mint mechanism | Burning mechanism after release | Dark nodes | Cost of eligibility to run a dark node poses centralization risk | $23.48 million | | dlcBTC | 2024 | DLC.Link | Self-locking and wrapping | Atomic swaps | Self custody | Highly decentralized | $2.19 million | | 21BTC | 2024 | 21Shares | Proprietary minting via the Onyx platform | Proprietary redemption | Institutional-grade 3rd party custody | Relies on the decentralization of Onyx | $4.8 million | | cbBTC | 2024 | Coinbase | Automatic minting and wrapping | Automatic redemption | Coinbase Exchange Custody | Centralization risks exist | $627,000 |
tBTC
tBTC, launched by Threshold Network in 2020, is a permissionless BTC-pegged token. Unlike WBTC, tBTC uses a decentralized group of nodes called signers to manage BTC deposits. It has maintained its peg to Bitcoin since inception, with a TVL of $193.51 million.
renBTC
renBTC is another ERC-20 token pegged 1:1 to Bitcoin, created on RenVM. It uses a lock and mint mechanism, allowing for trustless cross-asset transfers. Its current TVL is approximately $23.48 million.
dlcBTC
dlcBTC utilizes discrete log contracts for a self-wrapped form of Bitcoin on Ethereum, ensuring security and control for users. Its TVL stands at $2.19 million.
21BTC
21BTC, launched by 21Shares, aims to unlock Bitcoin liquidity for DeFi users on Solana and Ethereum. It currently holds a TVL of $4.8 million.
cbBTC
Coinbase's cbBTC operates on its Ethereum Layer 2 network, offering automatic minting and redemption, with a TVL of $627,000 shortly after launch.
Upcoming Wrapped Bitcoin Alternatives
Innovation continues with sBTC on Stacks, a 1:1 BTC-backed asset that aims to eliminate the need for centralized custodians.
Wrapped BTC tokens provide a way to deploy BTC across multiple blockchains, signaling the growing demand for Bitcoin in the DeFi market.
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