What is xBTC? Bitcoin reimagined for onchain natives

Magic internet money.

Digital gold.

And now, a national reserve asset.

Bitcoin’s dominance in the crypto space is unmatched. However, the lack of interoperability and smart contract functionality have long hindered its utility in the onchain realm.

Until now. Enter xBTC; a tokenized version of bitcoin designed to bridge the gap between access and function.

Here's everything you need to know about xBTC.

What are wrapped tokens?

Wrapped tokens are digital representations of an underlying asset that allow it to be used on different blockchain networks than its native one. This process involves locking the original asset and minting an equivalent wrapped version on the target chain, enabling cross-chain functionality and increased liquidity.

For coins with no smart contract functionality like bitcoin, wrapped bitcoin is a welcome solution. By resolving the inability to directly participate in DeFi ecosystems built on blockchains like Ethereum and Solana, bitcoin owners now have the ability to trade on DEXs, lend their wrapped bitcoin, and use it as loan collateral.

What is xBTC?

xBTC is a wrapped version of bitcoin, fully backed 1:1 by BTC reserves held securely in custody by OKX. It enables bitcoin to be used across multiple blockchains, unlocking new utility and interoperability. With xBTC, BTC holders can go beyond simply holding—they can participate in DeFi ecosystems and explore new ways to generate yield while still maintaining bitcoin exposure.

Key features of xBTC

1:1 collateralization

Unlike traditional financial instiutions that utilize the fractional reserve ratio for reserve requirements, every xBTC is backed by BTC held in OKX’s reserves. This 1:1 collateralization can be verified with proof of reserves that transparently shows existing crypto reserves in detail. By adhering to global custody standards, OKX minimizes counterparty risk and dangers of depegging so you can feel safe knowing your deposited BTC safely secured in institutional-grade wallets.

No wrapped token minting or burning fees

Tired of extra costs when moving BTC onchain? With xBTC, there are no fees for minting or redeeming—just pay the standard gas fees on the destination blockchain. Since these are typically just fractions of a cent, you can interact freely with DeFi apps without worrying about added friction or expense.

Multi-chain support

Keen to make your wrapped BTC work for you while you earn yields? xBTC will initially be available on booming onchain ecosystems like Sui, Aptos, and Solana so you can make use of top DEXs and lending protocols to provide liquidity or borrow against xBTC as collateral. This will be followed up with plans to expand to other popular networks in the near-future.

Transparent interoperability

xBTC allows BTC to be used on networks like Sui, Aptos, and Solana by giving OKX custody of the underlying BTC. In this model, users exchange direct BTC self-custody for xBTC to gain access to DeFi utility. In exchange, OKX provides institutional-grade security and verifiable 1:1 proof of reserves, offering users a secure and transparent experience with minimized counterparty risk.

Final words

xBTC represents a paradigm shift for bitcoin holders, combining BTC’s store-of-value appeal with the versatility featured in smart contract enabled-blockchains. By eliminating cross-chain friction and unlocking DeFi opportunities, OKX’s solution positions Bitcoin as a dynamic asset in the future where interoperability is vital. As the crypto ecosystem evolves, xBTC could become a cornerstone for liquid interoperability, offering users the best of both worlds with Bitcoin’s security and the innovation of decentralized finance.

Has our guide to xBTC piqued your curiosity? Check out our in-depth guide to depositing and withdrawing xBTC so you're aware of the step-by-step process of minting and redeeming xBTC. Additionally, if you're keen to learn more about our wrapped BTC token and the existing excitement surrounding it, our xBTC page has you covered.

If you're more of a visual learner, don't fret—our video guide to the entire xBTC withdrawal and depositing process will be up your alley.