4.1.0. Wrapped Technology
Bitcoin can only operate on its blockchain. Since the Bitcoin blockchain was not designed with smart contract functionality, it means Bitcoin cannot take part in DeFi.
That changed on 24 January 2019 when BitGo Inc, Kyber Network, and Ren (formerly Republic Protocol) released a whitepaper for wrapped Bitcoin, a token that runs on the Ethereum ecosystem.
It is called a wrapped token because the original asset, Bitcoin, was put in a wrapper, a kind of digital vault that allows the wrapped version to be created on another blockchain. Thus, a wrapped token is pegged to the value of the parent cryptocurrency.
In the case of wrapped Bitcoin, the wrapping was designed for the Ethereum smartchain, and the wrapped Bitcoin token was pegged to the value of the original Bitcoin. The wrapped Bitcoin was finally launched on 31 January 2021.
This means that Bitcoin has been wrapped to be able to participate in the DeFi activities of the Ethereum Ecosystem. This marked the birth of a new era in the Crypto Market.
With the increasing scalability difficulty and high cost of transaction charges (gas fees) on the Ethereum smartchain, many developers have turned their attention to the Binance smartchain, which is far cheaper and faster than the Ethereum smartchain.
Today, a huge number of wrapped tokens, including Bitcoin, have been developed to run on the Binance smartchain. These wrapped tokens can participate in the DeFi activities of the Binance Ecosystem.