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Wrapped Bitcoin (WBTC), the largest tokenized version of Bitcoin, has expanded to the Hedera network, a move that could open the door to more decentralized finance (DeFi) options for BTC holders.
The integration, announced Thursday, brings additional liquidity to Hedera, which already supports smart contracts and native tokenization and markets itself as a low-fee network with no frontrunning or. miner extractable value (MEV).
Frontrunning and MEV are tactics where validators rearrange transactions to benefit at the expense of users, a problem that Hedera’s consensus mechanism is designed to avoid.
The launch was supported by BitGo, a Hedera Board member and the primary custodian behind WBTC, alongside BiT Global and LayerZero, an interoperability provider.
WBTC gained popularity as one of the first large-scale Bitcoin-enabled solutions (BTC) holders to participate in DeFi. Wrapping allows BTC to convert to a token on another blockchain while remaining fully backed by Bitcoin held in custody.
In theory, this allows users to deploy their BTC into the smart contract ecosystem for lending, trading and other protocols without losing their underlying Bitcoin exposure.
Hedera has experienced a surge in DeFi activity, marked by a significant increase in total value closed over the past 12 months. Its native token, HBAR, is the 19th largest cryptocurrency by market capitalization, with an estimated market value of around $7 billion.
Related: Prosecutors are asking for a new trial in February or March for the MEV bot brothers
The Bitcoin DeFi sector is charting a growth path
Hedera’s move is part of a wider trend tying Bitcoin more closely to DeFi, as holders look for ways to use their assets in lending, trading and yield protocols.
As Cointelegraph reportedSeveral Bitcoin-focused companies argue that Bitcoin is too significant an asset to sit idle in wallets and increasingly serve as the foundation of its own financial ecosystem.
“Bitcoin DeFi is about building a trustless and permissionless financial system around Bitcoin, turning it into an active financial instrument, not just a one-off,” said Jacob Phillips, co-founder of the liquid staking protocol Lombard Finance, at the Bitcoin 2025 conference in Las Vegas.
Binance also highlighted the rise of the Bitcoin DeFi sector, referring to it as BTCFi, saying it can help drive new adoption of the digital asset.
The growth of the sectors “may strengthen the positive sentiment for Bitcoin in the medium and long term, Binance Research said in a report.
