Project Overview
- What is the primary goal or use case of the DeFi token?
The wrapped BTC token is a stablecoin that converts BTC to an Ethereum token. It is backed by a one-to-one principle (one BTC as a collateral for one wBTC). It permits its users to interact with different decentralized apps of Ethereum’s blockchain. It is especially used in the DeFi ecosystem in various ways: collateral for loans, a yield investment, a token to be swapped etc.
- What problem does this token aim to solve within the DeFi ecosystem?
The purpose of wBTC is to provide liquidity to the DeFi world. Bitcoin is the most popular cryptocurrency in the world. However, as bitcoin’s protocol does not natively provide options for any smart contracts, or DeFi use, wBTC aims to solve this issue.
Utility and Value Proposition
- What is the utility of the token within the ecosystem (e.g., governance, staking, fee payments)?
wBTC is a token that enables its users to operate on the Ethereum (and therefore DeFi) ecosystem. It does not open any rights for governance to its holders and, if not invested, does not generate any income. Its purpose is to provide liquidity to the platform and offer interoperability option.
- Does the token provide access to any exclusive features or services?
As mentioned above, wBTC does not give access to any exclusive features or services expect those offered on the DeFi world.
- How does the token generate value for its holders and users?
The token can generate value for its holders in two ways :
- Earning money by engaging in DeFi : earning yield by lending the token, making investment, contracting a loan to finance other activities etc.
- Money by trading : as wBTC is pegged to the BTC, an opportunity of profit can arise if the price deviates a little which can, if sold or bought at the right time, generate money.
- Is there any incentive for long-term holding (e.g., staking rewards or governance participation)?
wBTC does not offer any governance participation service that could enhance long-term holding. However, in some DeFi protocols, wBTC can be staked to earn rewards points. The purpose of staking is to enhance the stability of the protocol by gathering a pool of liquidity. Currently the most popular staking protocol for wBTC is Aave V3.
Governance and Community
- Is the token used for governance within the platform? If so, how does governance work (voting power, proposals)?
Not used for governance.
- How decentralized is the governance process? Who has control over the decision-making?
The DAO (decentralized autonomous organization) of wBTC is quite centralized. The members of the DAO are the 16 initial members and include the key merchants and custodians (such as Maker DAO, Bitgo etc who are responsible for the mint-burn procedure). They are the ones who oversee the protocol. Moreover, there is KYC obligation for wBTC, which makes it quite centralized.
- How active and engaged is the community around the token?
The community of wBTC is quite active and engaged in promoting the use of BTC for DeFi applications.
- Is there a clear plan for decentralizing control over time, if not already?
Even though centralization is one of the biggest critics of wBTC, at this point there is no clear plan for decentralization control over time.
Liquidity and Market Performance
- How liquid is the token? Is it listed on major exchanges (both centralized and decentralized)?
The purpose of the token is to enhance liquidity and it is a won battle. wBTC is listed on both centralized and decentralized exchanges: Coinbase, Binance, Kraken, Uniswap, Curve etc.
- What is the token’s trading volume and price history? Is it volatile?
Its total supply is currently standing at 129.07k. Its trading volume is:
- CEX volume : $177,852,043
- DEX volume ; $ 342,326,309
–> As per the last 24h data.
Regarding volatility, wBTC is critically intertwined with the value of the BTC and its volailty has been quite important over the time, however it has stabilized itself for the past year or so.
- Are there deep liquidty pools available for the token in decentralized exchanges (DEXs)?
There are some important liquidity pool available on DEX for wBTC :
- What is the market capitalization, and does it seem reasonable based on the token’s utility and growth potential?
wBTC’s current market capitalization is almost 9,7 md $. It’s important market capitalization seems quite reasonable if we considered its use case: a bridge between DeFi and BTC. It is used on various applications of DeFi which has been getting more and more attention lately.
Regulatory and Compliance
- Does the token comply with regulations in key markets (e.g., KYC/AML)?
As mentioned above, wBTC is a quite centralized token that is under the control of its DAO (composed of merchants and custodians). Therefore, these custodians adhere to a know your customer and anti-money laundering measures and comply with regulatory standards.
Technology and Smart Contracts
- What blockchain is the token built on (e.g., Ethereum, Binance Smart Chain, Solana)?
wBTC is built on the Ethereum blockchain and is and ERC-20 token (ERC-20 can be considered a norm that applies rules to the tokens built on tis blockchain.
- Does the blockchain support scalability, security, and low fees?
Ethereum, with its system of smart contracts and its Turing complete machine, it is an answer to the scalability issue posed by BTC. The fees on Ethereum are the gas fees. The price of it can depend on the congestion of the network and the intensity of the activity, but it is a quite high fee (relatively to other blockchains). Regarding security, ETH is a very secure blockchain thanks to its wide and active ecosystem.