BEFORE i START I WANT TO WARN ANYONE SWAPPING FOR BITCOIN ON ETHEREUM OR TRON TO MAKE SURE IT IS LEGIT WRAPPED BITCOIN. DO YOUR RESEARCH AS I'VE SEEN FAKE BITCOIN ON A SWAP SITE.
WTF is wrapped bitcoin you might be thinking. Is that a new coin? Wrapped bitcoin is bitcoin that is wrapped to go on another chain so it can be traded a defi'd on another chain. Is defi'd a word... it is now. The two chains that are looking at wbtc is ethereum and tron as these are the two that are working on their own defi products. When you have a wrapped bitcoin on the ethereum chain you would be able to swap your bitcoin for ethereum or any coin on the eth network their is a pool for. Pretty cool. And if you thinking who cares I can just sell it for eth well there is more.
Putting Your Bitcoin To Work
One on the criticisms that bitcoin faces is you don't get returns for it. People on Hive are spoiled with a daily return and a lot of us in crypto are looking for divs or APR when we invest. Now bitcoin can join the fun and have a strong yearly return. If you turn your bitcoin to wrapped bitcoin and then add it to a liquidity pool with ethereum you will get fees from each trade. This means your bitcoin grows continuously as it sits there. You will need to put it is a pool/site you trust but if you are holding bitcoin anyways why not put it to work.
You can pair it with ethereum, another strong coin or tether so you don't have to worry about the value going down. You will need to have the equivalent amount of bitcoin and the second coin so it can get expensive but you are getting a return for your bitcoin and second coin.
Not only did you just turn digital gold into digital gold with a dividend but you might get a high return for putting the coin in the LP. This is the crazy thing will LPs. If you put your wrapped bitcoin a pair that is very busy and people keep swapping in and out you could be seeing 1% returns a day. I'm not kidding. Realistically it is closer to 10-30% APR (which is still great) but with a lot of traffic you can go much higher. This is pretty good for a coin that previously had no dividends.
As I mentioned before this means you can turn any coin into a div coin.
Locked Bitcoin
There is also another perk, the more people who add bitcoin to the pool the more bitcoin that is taken off the market. And we all know what happens when you lower the supply of a coin. And since people are pairing bitcoin with eth that means there will be less eth on the market as well. This means you now have two coins going up in value and this will help the rest of the crypto market increase.
LPs and wrapping really are the future and the easier it is to swap between chains and the more returns we get for our coins while lowering as much risk as we can the better the ecosystem.