Top Wrapped Bitcoin (WBTC) Alternatives You Should Know in 2025

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As the decentralized finance (DeFi) ecosystem continues to evolve, new solutions for bringing Bitcoin’s liquidity to other blockchains have emerged. While Wrapped Bitcoin (WBTC) has long dominated this space, growing concerns around centralization have spurred the development of innovative WBTC alternatives. These new entrants aim to offer greater decentralization, improved security, and seamless interoperability across networks—all while maintaining a 1:1 peg with BTC.

In this guide, we’ll explore the most promising WBTC alternatives reshaping how Bitcoin interacts with DeFi protocols in 2025. From tBTC and dlcBTC to cbBTC and sBTC, you'll gain a clear understanding of how each solution works, their key differences from WBTC, and what makes them compelling options for Bitcoin holders.

What Is Wrapped Bitcoin (WBTC)?

Wrapped Bitcoin (WBTC) is an ERC-20 token backed 1:1 by Bitcoin, designed to bring BTC into Ethereum’s DeFi ecosystem. It enables developers to integrate Bitcoin into smart contracts and allows BTC holders to earn yield, provide liquidity, or borrow assets across decentralized applications.

To mint WBTC, users send BTC to a custodian—currently BitGo—who mints the equivalent amount of WBTC on Ethereum. The redemption process reverses this flow. While effective, WBTC relies on centralized entities for custody and merchant operations, raising concerns about trust and single points of failure.

Despite these drawbacks, WBTC remains the largest wrapped token by total value locked (TVL), with over $9 billion in assets. However, its centralized model has paved the way for more decentralized alternatives.

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Leading WBTC Alternatives in 2025

As demand grows for trustless and interoperable Bitcoin solutions, several notable WBTC alternatives have gained traction. Each offers unique approaches to custody, minting, and decentralization.

tBTC: A Decentralized Alternative Built on Threshold Cryptography

tBTC, developed by Threshold Network (formerly Keep Network), is a permissionless, non-custodial BTC wrapper that eliminates reliance on centralized entities. Instead of trusted custodians, tBTC uses a network of staked signers who collectively secure deposited BTC through threshold signatures.

When you deposit BTC, a randomly selected group of nodes verifies and locks the funds. Only when a threshold majority agrees can transactions be executed—protecting against collusion. The minting process is simple: generate a deposit address, send BTC, and receive tBTC on Ethereum.

Redemption involves burning tBTC and requesting BTC withdrawal, which triggers a multi-step verification process before funds are released. Unlike WBTC, tBTC is supply-pegged rather than price-pegged, meaning it may trade at slight premiums or discounts based on market dynamics.

With a TVL of $222 million, tBTC stands out for its strong decentralization model powered by staking and node participation.

Key Features:

dlcBTC: Self-Custodied Bitcoin Wrapping via Discreet Log Contracts

dlcBTC, launched in 2024 by DLC.Link, leverages Discreet Log Contracts (DLCs)—a cryptographic innovation originally proposed by Lightning Network developer Tadge Dryja. This approach allows users to wrap BTC without surrendering control.

Users lock BTC into a DLC using a multisignature UTXO: one key is held by the user, the other distributed among proving nodes. Only the depositor can access the funds, ensuring self-custody and eliminating third-party risk.

The protocol uses Bitcoin’s own hash power for security and supports direct conversion back to BTC through centralized exchange pairs during early adoption. Once dlcBTC is burned, provers release the locked BTC.

Though still in early stages with a TVL of $2.49 million, dlcBTC represents a major step toward fully trustless BTC wrapping.

Key Features:

21BTC: Institutionally Secured Wrapped Bitcoin

Launched by asset manager 21Shares in 2024, 21BTC brings Bitcoin liquidity to both Solana and Ethereum. It operates with full institutional backing—BTC reserves are held in cold storage by third-party custodians to fully collateralize the token supply.

Minting and redemption are handled through Onyx, 21Shares’ proprietary operating platform. Users submit requests and transfer BTC to custodians; once verified, 21BTC is issued. Redemption follows a similar reverse flow.

While efficient and secure, 21BTC relies on centralized infrastructure—making it less decentralized than tBTC or dlcBTC. It currently holds a TVL of $6.2 million and isn’t available in all jurisdictions, including the U.S.

Key Features:

cbBTC: Coinbase’s Seamless Wrapped Bitcoin on Base

Coinbase’s entry into the wrapped BTC space—cbBTC—was launched in 2024 for its Ethereum Layer 2 network, Base. Designed for simplicity, cbBTC automatically converts BTC sent from Coinbase accounts into ERC-20 tokens at a 1:1 ratio.

The reverse is also true: sending cbBTC back to your Coinbase wallet converts it instantly to native BTC. This seamless integration removes friction for retail users unfamiliar with bridges or manual minting.

Backed entirely by Coinbase’s custodied reserves, cbBTC benefits from strong brand trust. Within just seven days of launch, it reached a TVL of $123 million—demonstrating rapid adoption.

However, its reliance on a single exchange makes it highly centralized.

Key Features:

👉 See how major exchanges are redefining Bitcoin utility in DeFi.

Up-and-Coming: sBTC on Stacks

One of the most anticipated future alternatives is sBTC on Stacks—a Bitcoin Layer 2 protocol aiming to enable smart contracts directly on Bitcoin’s consensus layer.

sBTC promises full decentralization by allowing users to participate in the protocol without relying on custodians. Early versions will run on a limited set of signers during bootstrapping but aim to transition fully permissionless over time.

With near-instant conversion times—BTC to sBTC in three blocks (~30 minutes), and back in six (~60 minutes)—sBTC could become a major player in trustless Bitcoin interoperability.

Currently live on testnet and integrated with Aptos, sBTC is poised for mainnet launch in late 2025.

Frequently Asked Questions (FAQ)

Q: Why do we need WBTC alternatives?
A: WBTC relies on centralized custodians like BitGo, creating potential points of failure. Alternatives offer improved decentralization, self-custody, and reduced counterparty risk.

Q: Which WBTC alternative is the most decentralized?
A: tBTC and dlcBTC lead in decentralization—tBTC through staked signers and dlcBTC via self-custodied DLCs.

Q: Can I earn yield with these wrapped BTC tokens?
A: Yes—most WBTC alternatives can be used in DeFi protocols like Aave or Uniswap to provide liquidity or earn interest.

Q: Are wrapped BTC tokens safe?
A: Safety depends on the model. Custodial versions (e.g., cbBTC) rely on institutional security; non-custodial options (e.g., tBTC, dlcBTC) reduce reliance on third parties but require technical understanding.

Q: How do I convert wrapped BTC back to native Bitcoin?
A: Each protocol has its own redemption process—burn tokens through the issuing platform or bridge to initiate BTC release.

Q: Will wrapped BTC replace native Bitcoin?
A: No—wrapped tokens are representations used for interoperability. Native BTC remains the underlying asset securing these systems.

👉 Start exploring secure ways to leverage Bitcoin in DeFi today.

Final Thoughts

The rise of WBTC alternatives reflects a broader shift toward trustless, user-controlled finance. As Bitcoin continues to dominate digital asset markets, the demand for seamless cross-chain utility will only grow.

Whether you prioritize decentralization (tBTC, dlcBTC), ease of use (cbBTC), or institutional backing (21BTC), there’s now a wrapped Bitcoin solution tailored to your needs.

By understanding these options—and their trade-offs—you can make informed decisions about how to deploy your BTC across the expanding DeFi landscape in 2025 and beyond.