So if i place my bitcoin one of these platforms why do they ask me to convert it to wrapped btc to earn interest or whatever token they offer? How will i earn on bitcoin if it goes up and its converted to wrapped bitcoin? I want to keep my bitcoin bitcoin. i am confused by how this works. My main question probably is why do i have to convert my bitcoin to something else if i just want to earn on my original bitcoin? Doesn't that defeat the purpose of earning on bitcoin?
Since the platform does not exist within the Bitcoin blockchain, it needs to be tokenized/converted into a pegged/supported token of bitcoin. It is required because of how the way defi itself interacts, they can only talk into their own bitcoin token, not the real bitcoin on the Bitcoin blockchain.
The way of the mechanism work is the platform, which, in this case, Sovryn or ALEX can only comprehend the systemized token of the bitcoin, hence, your fund/coin(bitcoin) needs to be converted.