Wrapped Bitcoin (wBTC), Compound Bitcoin (cbBTC), and tBTC are three prominent forms of Bitcoin in the decentralized finance (DeFi) space. These wrapped tokens represent Bitcoin on different blockchains, allowing users to interact with Bitcoin in various DeFi applications.
wBTC is the most well-known wrapped Bitcoin token, as it is widely accepted across DeFi platforms. It is an ERC-20 token on the Ethereum blockchain, backed 1:1 by Bitcoin held in reserve. Users can convert their Bitcoin into wBTC and use it in DeFi applications like lending, borrowing, and trading.
cbBTC, on the other hand, is a tokenized version of Bitcoin on the Compound Finance platform. It allows users to earn interest by supplying their Bitcoin to the Compound protocol. Users receive cbBTC in return, which represents their share of the interest generated by their Bitcoin holdings on Compound.
tBTC is a decentralized and trustless form of wrapped Bitcoin, allowing users to convert their Bitcoin into a tokenized version on the Ethereum blockchain. tBTC uses a unique system of deposits and withdrawals to ensure the security and integrity of the wrapped Bitcoin tokens.
Each of these wrapped Bitcoin tokens has its own advantages and use cases within the DeFi space. wBTC is widely accepted and used in various applications, while cbBTC allows users to earn interest on their Bitcoin holdings. tBTC provides a decentralized and trustless way to interact with Bitcoin in the DeFi ecosystem.
Overall, wrapped Bitcoin tokens like wBTC, cbBTC, and tBTC play a crucial role in bridging the gap between Bitcoin and DeFi, allowing users to leverage their Bitcoin holdings in the growing decentralized finance space.