I have not looked into WBTC.  Does it claim to be 1:1 redeemable for actual bitcoins?  If so, I really don’t see a problem (except perhaps for the people who trust that claim).


So...?  At some point, if it claims to be 1:1 redeemable, the wrappers need to be able to unwrap it.  Meaning that they need to have actual bitcoins.(*)  Otherwise, the holders of the wrapped stuff are left with empty bags—and that is pretty much just their problem.  If (if) the backing is honoured with real Bitcoin, I don’t see any problem with that at all.

(* Another subject that I recently began to write about, and did not yet finish:  Fractional reserve banking is mathematically impossible with Bitcoin.  Because fractional reserve banking is not what most people think it is—it is worse—it creates money out of thin air, whereas it is impossible to loan new bitcoins into existence out of nowhere.)

It runs on a different blockchain, so it also doesn’t have the dangers of various sidechain proposals that could interfere directly with the security of the Bitcoin blockchain.


That is Bitcoin.

Defi generates much hype; but contrary thereto, it is not actually taking over the world anytime soon.


I am not defending WBTC.  I just don’t see how it significantly threatens Bitcoin; and you have not proposed any way it can.

So what if people issue instruments based on Bitcoin?  It is bound to happen; and it’s not necessarily a bad idea.  (I myself have had other, very different ideas for Bitcoin-backed instruments.)  At the bottom line, either the bitcoins are there, or they aren’t.  That is a matter of counterparty risk, which falls on the people who trust the counterparties.