As Bitcoin matures into an institutional-grade asset, the question is no longer whether to hold BTC, but how to put it to work.
Wrapped Bitcoin refers to a representation of BTC that can operate on networks outside of Bitcoin’s native chain. Since Bitcoin does not support smart contracts or decentralized applications directly, wrapping allows BTC to be used in environments like Ethereum, Base, or other major chains.
Wrapped BTC is typically pegged 1:1 to native Bitcoin. This can happen through custodial models, where real BTC is locked by a third party, and a corresponding token is issued on another chain. Alternatively, it can be achieved through trust-minimized bridges, where BTC is moved across chains using on-chain mechanisms without relying on a centralized custodian.
In both cases, the goal is the same: to enable BTC to participate in programmable finance while maintaining a verifiable link to the underlying asset.
This blog examines three distinct models for wrapping Bitcoin and makes the case for why rBTC, Rootstock’s programmable BTC, stands out as the most institutionally credible and Bitcoin-aligned solution among them.
Comparing Wrapped Bitcoin Models
The following three Bitcoin-wrapping approaches reflect different priorities.
WBTC, cbBTC, and rBTC all bring BTC into smart contract environments, but each is built with different goals in mind:
- WBTC emphasizes integration with Ethereum’s DeFi ecosystem. It is issued through BitGo and widely adopted across protocols such as Aave, Maker, and Curve, making it a go-to option for Ethereum-based liquidity.
- cbBTC is native to Base and designed for ease of use within the Coinbase ecosystem. It offers tight integration with Coinbase infrastructure, providing a simple onboarding path for users already within that environment.
- rBTC is deployed on Rootstock, a Bitcoin-secured, EVM-compatible network. It also circulates on Ethereum, Base, Arbitrum, and other major chains via LayerZero. Like WBTC and cbBTC, it supports its respective ecosystems effectively, but does so without compromising on custody.
Trade-offs in Custody, Security, and Utility
The choice of wrapped BTC model carries real implications. For institutional allocators, it is not just a technical decision, but one that shapes custody risk, network exposure, and long-term alignment with Bitcoin’s principles.
WBTC is issued through BitGo and a network of approved merchants. While it is deeply integrated across Ethereum DeFi protocols, its custody model is centralized. This requires institutional users to trust a single custodian and associated off-chain redemption infrastructure.
cbBTC is managed entirely by Coinbase and is native to Base. Its minting and redemption are automated through Coinbase’s exchange environment, providing simplicity for onboarding but placing all control and risk within a single platform.
rBTC is anchored to Bitcoin’s proof of work and avoids both custodial control and validator-based consensus. Its distributed peg system, secured by hardware modules, ensures no single party can manipulate issuance or redemption. Beyond Rootstock, it moves seamlessly because of its multichain capabilities via LayerZero. This combination of security, decentralization, and multichain programmability makes it the most Bitcoin-aligned and secure wrapped BTC option available.
Choosing Based on Institutional Priorities
Each model supports a different type of institutional strategy, depending on where and how BTC is being deployed.
WBTC is typically used by trading desks and crypto funds operating within Ethereum’s DeFi ecosystem. It integrates easily with protocols like Aave and Maker, making it ideal for short-term strategies that require deep liquidity and rapid settlement.
cbBTC fits use cases where institutions already operate through Coinbase. This includes corporate treasuries or custodial service providers that prefer centralized flows. Its automated minting process and integration with Base simplify internal treasury operations and tokenized asset issuance.
rBTC is suited to long-term allocators, Bitcoin-focused funds, and organisations managing BTC treasuries. By bringing BTC into the Rootstock network, these entities gain access to decentralized finance while preserving Bitcoin’s trust-minimized model. Rootstock offers a programmable environment secured by Bitcoin’s proof of work, allowing institutional holders to deploy BTC without relinquishing control to custodians or validator networks.
Together, these models reflect distinct approaches to institutional BTC usage. While WBTC and cbBTC are optimized for convenience and ecosystem-specific access, rBTC offers a more Bitcoin-aligned foundation for institutions that prioritize decentralization, control, and long-term compatibility with Bitcoin’s core principles.
In a nutshell:
|
Category |
Feature | rBTC | WBTC |
cbBTC |
| Network Compatibility | Blockchain | Rootstock (native), also live on Ethereum, Base, Arbitrum | Ethereum, supported on L2s & cross-chain protocols | Base (native), also bridged to Ethereum |
| Smart Contract Support | Yes (Rootstock & EVM chains) | Yes (Ethereum & L2s) | Yes (Base, EVM-compatible) | |
| Gas Token? | Yes | No | No | |
| DeFi Reach | DeFi Integration | LayerZero-enabled multichain usage, Rootstock-native apps | Aave, Maker, Curve | Growing Base ecosystem support |
| Custody & Peg | Custody Model | Decentralized (PowPeg, distributed HSMs) | Centralized (BitGo & merchants) | Centralized (Coinbase reserves) |
| Minting | Peg-in via on-chain BTC lock | Minted by BitGo after BTC deposit | Minted automatically via Coinbase | |
| Redemption | Peg-out via trust-minimized peg | Burn and redeem via custodian or merchant | Sent to Coinbase for BTC redemption | |
| Security & Governance | Security Model | Bitcoin proof-of-work | Ethereum validators & BitGo | Base validators & Coinbase |
| Decentralization | High | Low | Low | |
| Market Profile | APY Range | 4 – 6% (variable) | Varies by protocol | Varies by platform & chain |
| Launch Year | 2018 | 2019 | 2024 |
Why Institutions Should Choose rBTC
rBTC brings together the two things institutions care most about when deploying BTC: functionality and control. It allows Bitcoin to access decentralized applications by bringing it into the Rootstock network, where it remains anchored to Bitcoin’s native security through merge-mining.
This model avoids the trade-offs common in other wrapped BTC systems. rBTC uses a decentralized, hardware-enforced peg and does not rely on validators, staking, or centralized issuance. For allocators, this provides a trust-minimized structure for activating BTC within programmable finance while preserving direct exposure to the asset’s original security guarantees.
This distinction becomes especially important at the institutional scale. Imagine a sovereign reserve placing its national Bitcoin holdings under the control of a foreign custodian. The risks are political, operational, and strategic. Yet many wrapped Bitcoin solutions introduce this very scenario by design.
rBTC offers a structurally sound alternative. It gives treasuries and funds the ability to use their BTC within a programmable framework without surrendering ownership, visibility, or autonomy. For institutions looking to extend Bitcoin’s utility while staying true to its principles, Rootstock provides the most Bitcoin-aligned infrastructure available.