How-to Guide for Wrapping and Unwrapping BTC with Hodlnaut
With cryptocurrency gaining popularity, the demand for new coins is on the rise. Users want to diversify their crypto holdings without having to sell their cryptocurrencies. One way of doing this is by swapping tokens. In this guide, we will focus on wrapping and unwrapping bitcoin in particular.
Traditionally, the wrapping of bitcoin involves a merchant and a series of steps that can be time-consuming. Additionally, users also have to choose the right merchant for wrapping their BTC to avoid getting fake WBTC in the new wrapped bitcoin market.
However, with Hodlnaut’s Token Swap functionality, you can now wrap and unwrap BTC within the platform without any hassle. In this guide, we will learn how to wrap and unwrap BTC with Hodlnaut.
What is Wrapped BTC?
Wrapped BTC (WBTC) is an ERC20 token backed 1:1 by bitcoin, which enables bitcoin holders to use tokenized bitcoin in Ethereum-powered decentralized applications and trade it on decentralized exchanges. To tokenize BTC into WBTC, bitcoin holders need merchants who wrap the coins by acting as a custodian.
Typically, a bitcoin holder connects with a merchant to start a transaction, after which the custodian mints WBTC to the merchant’s Ethereum address. The merchant then sends the bitcoin holder’s BTC to the custodian, and after a specific set of confirmations, the merchant performs the required AML and KYC procedures on the bitcoin holder. Finally, the bitcoin holder and merchant perform an atomic swap or utilize an exchange, after which the merchant receives the BTC, and bitcoin holders get their WBTC.
A more viable alternative is to wrap and unwrap bitcoin with a secure and user-friendly platform like Hodlnaut.
How to Wrap and Unwrap BTC with Hodlnaut?
Hodlnaut enables the wrapping and unwrapping of BTC with its Token Swap functionality. Exchanging BTC for WBTC lets you easily integrate the cryptocurrency into the Ethereum space and access the features that Ethereum’s blockchain provides. Essentially, users can benefit from unique wallets, smart contracts, games, Dapps, and the like, which helps you make the most of your cryptocurrency investment without selling your bitcoin.
Here are the steps you need to take in order to wrap and unwrap BTC with Hodlnaut.
1. Login to Your Hodlnaut Account
Visit https://app.hodlnaut.com/ and log into your account.
2. Navigate to Token Swap from the Dashboard
Go to the “Token Swap” tab on the dashboard, or you can also click on the token swap button from the Balances Overview.
3. Choose the Tokens You Would Like to Swap
You will see an interface as shown below. It shows your account balance in the crypto asset selected, and you can choose to either pay in Bitcoin and receive in Wrapped Bitcoin or vice-versa. For this example, we will wrap bitcoin to WBTC.
4. Enter the Amount You Wish to Pay
Enter the amount you would like to pay in BTC, and you will see the amount you will receive in WBTC.
5. Review the Quote
To double-check the transaction, you will be prompted to review the quote within 30 seconds before placing your order.
6. Place Order
Click on “Place Order,” and you will get the order confirmation as shown below.
Thus, you can wrap and unwrap BTC with the above-mentioned simple steps without relying on any merchant and within a secure platform. The steps given above are for swapping BTC to WBTC. However, you can follow the same steps to swap WBTC to BTC as well. All you have to do is to select the asset from the drop-down on the interface accordingly.
Want to wrap and unwrap BTC without any hassle? Use our token swap feature by signing up today!