Swap your BTC to WBTC instantly on fox.exchange
Fox.exchange is proud to announce the listing of WBTC.
The race towards increased liquidity in the crypto space rages on! With this new development, fox.exchange is at the forefront of this revolution through its partnership with the WBTC community.
Now, users can swap their BTC for WBTC on our exchange and access various DeFi possibilities.
What is WBTC?
Cryptocurrencies have evolved to encompass a large part of the financial industry and liquidity is increasingly becoming a bottleneck towards that growth. Fast-rising innovations such as the booming Decentralized Finance (DeFi) space have further increased appetite for liquidity among crypto enthusiasts, investors, and innovators.
Bitcoin boasts of more than 50% of the total crypto market capitalization. However, the cryptocurrency witnessed several episodes of illiquidity in the past. At one time, Bitcoin's volatility led to a fall in its trading volume below $5 billion per day, yet the cryptocurrency routinely trades at daily volumes above $20 billion.
To solve this problem, WBTC was created as a tool that delivers the power of Bitcoin’s high trading volumes to the Ethereum ecosystem of decentralized financial applications.
WBTC (Wrapped Bitcoin) is an ERC20 token that operates on Ethereum’s blockchain and each WBTC token is designed to represent one BTC. Therefore, WBTC can be converted to Bitcoin and vice-versa.
WBTC is the creation of a collaborative project between major players in the DeFi (Decentralized Finance) space including BitGo, MakerDao, Ren, Kyber, and Compound. With WBTC, Bitcoin can be standardized to the format of a more liquid ERC20 token making it easier to use it in programming smart contracts, building decentralized lending and borrowing protocols.
How does WBTC work?
Unlike the original, WBTC operates on a (PoS) proof-of-reserve community-backed system where a chosen custodian provides secure storage of all minted WBTC and merchants act as administrators who initiate the minting of new WBTC.
Like most stable tokens that use the proof of reserve consensus protocol, WBTC will undergo regular audits. The public will have access to published audits of on-chain transactions therefore users will be able to verify how much WBTC was minted and how much BTC was sent to the WBTC address on the Bitcoin blockchain.
Burning of WBTC to redeem BTC will be tracked for transparency as well. To swap your BTC to WBTC, users interact with Merchants whose main purpose is to initiate the minting of WBTC through several procedures of identity verification. The user’s BTC is then moved to the custodian for secure storage and WBTC is sent to the user’s wallet.
What is the purpose of WBTC?
WBTC is essential especially for decentralized exchanges that have since been plagued by low liquidity. Also, as a permissionless ERC20 token that is pegged to Bitcoin on a 1:1 ratio, WBTC is a tool that Dapp and DeFi developers can use as a building block for even better financial innovations.