AAX Academy takes you through an article to understand the popular DeFi project WBTC

Wrapped Bitcoin (WBTC) is an ERC20 token created to integrate Bitcoin with DeFi. The token acts as a stablecoin for Bitcoin, meaning that 1 WBTC will always represent the value of 1 BTC. Despite the number of new coins taking the top spot on the crypto charts, Bitcoin is still the biggest coin in terms of market share, so it makes perfect sense to inject the full power of the original currency into DeFi. As an ERC20 token, WBTC transfers faster than regular BTC, but the key advantage lies in the integration with dApps, Ethereum wallets and smart contracts.

AAX Exchange once again issued a false website anti-fraud risk warning: According to the official announcement of AAX, some third parties that have nothing to do with AAX or are not authorized by AAX have recently tried to use AAX brand awareness through emails, WeChat, and telegrams. Fake AAX customer service, fake AAX website or mobile application for fraudulent activities, some users have been deceived, resulting in financial losses. The AAX platform sincerely reminds users to be cautious when dealing with any third party. If you find any illegal acts impersonating or abusing the name of AAX, you can directly feed back to the official online customer service through the official website or report complaints to cs@aax.com. For details of the case, please refer to the original link. [2020/11/2 11:26:20]

Since its inception, WBTC has generated a lot of interest across DeFi applications, including lending, derivatives, DEXs, and payment protocols.

AAX Financial Treasure limited-time "salary increase season" starts: According to the official website of AAX, AAX Exchange has launched a limited-time interest rate increase activity for Financial Treasure. Support AAX platform currency AAB, BTC, ETH and other currencies.

It is understood that AAX Wealth Management is a current wealth management product launched by AAX Exchange in August this year. The minimum interest calculation period of the product is minutes, which breaks the way of other platforms that require a minimum holding of one day before interest calculation. All products As a demand product, it can be deposited and withdrawn at any time. [2020/9/1]

Bitcoin Tokenization

Wrapped Bitcoin launched on Ethereum in January 2019 as part of a collaboration between mainstream players in DeFi such as Ren, BitGo, Compound, Kyber, MakerDAO, and Set Protocol. Today, the project is managed by a Decentralized Autonomous Organization (DAO) called WBTC DAO.

The AAX Exchange August Futures Contract Trading Contest will end on August 17: According to the announcement on the AAX official website, the August Futures Contract Trading Contest (Round 1) ended on August 7 with 233 registered users, and the current prize pool is 5 BTC . The AAX August Futures Contract Trading Contest will end on August 17. If the total number of applicants exceeds 1,500 at that time, users who meet the transaction volume requirements of the event will have the opportunity to earn the highest score of 20 BTC. For details of the event, please refer to the original link. [2020/8/10]

For DeFi, one of the biggest advantages of WBTC is the injection of liquidity brought by tokens. Many of the most popular DeFi dApps require users to put up their own collateral to use the service. For example, when using Compound to borrow and lend crypto assets, users need to lock up a certain amount of collateral. Using only ETH would limit the growth rate of these protocols, but by integrating the service with Bitcoin, this limitation has been removed. There are more and more people investing more money in Bitcoin.

Now, people can spend these funds through WBTC-enabled DeFi protocols while holding Bitcoin.

Operation mode of WBTC

The framework of the WBTC token has 3 main components: receiving, minting and burning.

To get WBTC, you need to receive tokens from a WBTC merchant. The merchant will conduct KYC/AML procedures and verify your identity. Once complete, the transaction is executed, transferring Bitcoin to the merchant and WBTC to you. Minting refers to the process of creating new tokens. Minting in the framework is initiated by merchants and executed by custodians. Destruction refers to the act of converting bitcoins into WBTC tokens, and only merchant addresses can be destroyed. The amount to be "burned" is deducted from the merchant's WBTC balance (on-chain), which then reduces the WBTC supply.

As you can see, WBTC requires trust in people and systems, not pure code. To promote trust and transparency, WBTC conducts regular audits and publishes all on-chain transactions and verifications of the Bitcoin and Ethereum networks. Anyone can check how much BTC has been sent to a WBTC address on the Bitcoin blockchain, match the transaction with the creation of WBTC, and verify the destruction process of WBTC, redeeming BTC on-chain.

If you just want to trade WBTC, it's much simpler. Most DEXs operating in the DeFi space support the token, including Uniswap, Kyber, and SushiSwap, as well as a growing number of centralized exchanges such as AAX. You can then use that WBTC for any other protocol in DeFi like Compound, Aave, or Set. Direct swaps between WBTC and BTC are only possible through official WBTC merchants, including Kyber, Dharma, Set, GOPAX, AirSwap, Prycto, ETHfinex, and Ren.

The future of WBTC

The future of WBTC lies not only in how individual traders use it, but how DeFi developers deploy it strategically. As an ERC20 token, Bitcoin in the form of WBTC is another building block in the modular system design of DeFi protocols. Now, it's up to the most innovative developers to find more interesting ways to play, combining the best of Bitcoin, Ethereum, DeFi, and innovative finance into one platform.

At present, AAX has opened the deposit and withdrawal of WBTC tokens. For details, please refer to the official website of AAX (www.aax.com).

Tags：

USDT