I think the wrapped BTCs, especially the decentralized approaches to it, are clever links that allow for the transfer of BTC value over to the Ethereum ecosystem.
It's a way of selling BTC for other tokens, extracting and removing its value over time, and instead investing it into DeFi and similar.
Re:Ethereum 2.0 launches
by konschubert on Tuesday December 01, 2020 @03:44PM
(#25269645)
Interesting! How are they wrapped? Do ppl trade bitcoin on ethereum without actually using the bitcoin blockchain?
They trade a token, sometimes called a stablecoin, that represent BTC as its underlying value.
Primarily two extremes for how this is done: Centralized, like WBTC (https://coinlist.co/help/what-is-wrapped-bitcoin-wbtc), and decentralized, like tBTC (https://defirate.com/tbtc/)
Besides the extremes, there's the pragmatic in the middle - interoperability in general. RenVM supports Bitcoin and many other coins on multiple hosts, not just Ethereum (eg. Polkadot):
I'm not convinced RenVM is really in the middle in its current state. Currently the core team holds all of the keys for the over $300M in Bitcoin stored by their project [0]. I'd take wbtc, which is held by a consortium of well known custodians in the space over that any day.
[0] https://www.theblockcrypto.com/daily/76787/ren-bitcoin-walle...
But... is it like sports memorabilia at that point, the value is all perception rather than utility and could one day just.. collapse