What Are Wrapped Tokens?
Wrapped tokens are token assets, hosted on a blockchain, that are pegged in value to the assets they represent. This allows users to transfer their tokens from one blockchain to another, expanding the utility of the tokens to work on multiple networks.
Why Use Wrapped Tokens?
Previously, for example, if you owned Bitcoin, there was no way to use it on other blockchains. But what if you wanted to earn a higher yield on your Bitcoin through yield farming or other DeFi innovations? That’s where tokenized Bitcoins come in. The most popular use case for tokenized Bitcoin is to “wrap” them into Wrapped Bitcoin (WBTC). This extends Bitcoin’s utility, giving it more functionality depending on which blockchain the token is running on.
The popularity of wrapped tokens have helped power the DeFi ecosystem. On Ethereum, the total market value for wrapped BTC tokens alone exceeds $1.8 billion. In fact, over 0.6% of all minted Bitcoin are wrapped, a number that is steadily increasing.
Introducing BTokens: Wrapped Tokens from Binance
We wanted to bring our own take on wrapped tokens with Project Token Canal. When we announced Project Token Canal, we initially supported BTC, BTC BEP2, and BTC BEP20 deposits and withdrawals, allowing users to move tokens between Binance Chain and Binance Smart Chain. Within weeks, we expanded support to over 30 tokens.
Now, we’re going one step further with BTokens, which expands upon the original vision of Project Token Canal. With BTokens, you can convert your crypto assets onto Ethereum, and explore a new ecosystem of decentralized apps and projects.
Easily convert your tokens to Ethereum with BTokens
The first batch of BTokens include BTC, DOT, FIL and WRX. Once wrapped, they are converted into BBTC, BDOT, BFIL, and BWRX, which are ERC20 versions of the underlying (original) asset. We’re also supporting the deposit and withdrawal of BTokens on Binance.com. If you want, you can move these tokens outside of Binance.com, and onto the Ethereum network, giving you more control over your assets.
Because these BTokens are issued by Binance and guaranteed via a verifiable 1:1 peg with native assets, you can trust that these tokens maintain their value when moved from one blockchain to another. In addition, these BTokens are covered by the SAFU fund.
Further bridging the CeFi and DeFi ecosystems
DeFi promises to give users control over their assets, so interoperability is key. That’s why we made Binance Smart Chain 100% backward compatible with the Ethereum network. With BTokens, we’re doing the same for your tokens, giving you an additional level of freedom over your crypto assets. So far, we’re seeing fast adoption of BTokens from users around the world. Recently, BBTC was listed on Cream Ethereum Platform and ForTube, and there’s already a total of $350 million worth of BTokens on Binance Smart Chain.
We look forward to sharing more exciting news with you on Project Token Canal, which is part of our larger initiative to bridge various blockchains so anyone can freely turn their assets into wrapped tokens, and maximize the utility and value of their crypto holdings.
