TL;DR: Do you own BTC? You probably already know you can make a profit by trading. But did you know there are other ways you can earn? Today, we’re introducing a simple guide to show you how to put your BTC to work in just a few taps.
Wrapped Bitcoin (WBTC) is an ERC20 token backed by Bitcoin. 1 BTC = 1 WBTC. It provides BTC enthusiasts with a rare opportunity to earn interest with minimal effort.
ZenGo recently added support for WBTC, providing our customers with several ways to earn interest while HODLing.
Below, we explore WBTC, its benefits, and explain how you can earn interest with WBTC on ZenGo.
What is WBTC?
Wrapped Bitcoin (WBTC) is a project by Kyber, Compound, MakerDAO, and other well-known players in the crypto ecosystem. The project is governed by a community of members through a Decentralized Autonomous Organization called the WBTC DAO.
In a nutshell, WBTC is an ERC20 token fully backed by Bitcoin. So, for every WBTC that exists, there is one Bitcoin held by a custodian. That means every WBTC effectively represents and equals one Bitcoin. It’s possible to convert WBTC to BTC and BTC to WBTC.
While WBTC is not the only token aiming to bridge the gap between the BTC and ETH ecosystems, it is the fastest growing and most popular one.
What are the benefits of WBTC?
Why do you need WBTC when you already own BTC? Why would anyone need to buy a WBTC token representing Bitcoin when you could just buy or own Bitcoin?
WBTC does offer significant benefits for both individual crypto users and the wider Ethereum / DeFi ecosystem.
WBTC essentially builds a bridge between the Bitcoin and Ethereum networks. It enables BTC, which is by far the most traded crypto, to be used in financial services built in the Ethereum ecosystem like decentralized exchanges (DEXs) and dApps. This helps drive more liquidity into the Ethereum network’s DeFi ecosystem.
With WBTC, any smart contract or Dapp can now include Bitcoin transactions!
For example, you can now use your BTC converted to WBTC to participate in lending services and earn interest.
Swap and save: earn with WBTC and ZenGo
If you own BTC or any other asset in your ZenGo wallet, you can start earning interest on WBTC by following these steps:
1. Swap your asset for WBTC
Using ZenGo’s new Swap feature, you can swap any ZenGo-supported asset to WBTC and store it in your ZenGo wallet. In just a couple of taps, you can trade your holdings for WBTC.
2. Put your WBTC in Savings
With ZenGo Savings, you can put your WBTC to work. Instead of waiting for the BTC price to go up, put your WBTC in Savings and watch it grow.
Bonus tip for advanced users: WBTC on Compound
Another exciting use case for WBTC is using it as collateral on Compound. Recently, Compound announced the addition of WBTC to it’s supported assets. It launched on Compound with a 40% collateral factor, meaning you can loan 40% of the WBTC you use as collateral.
At ZenGo, we’re always looking to provide our customers with new ways to grow their crypto. With WBTC on ZenGo, you can now put your crypto to work in just a few taps.
Check it out today.