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An important \u201cwrapped\u201d token<\/span><\/a> nearly unraveled last week\u2014the latest crypto product to be hurt by the fallout of the once-dominant FTX exchange which collapsed earlier this month.\u00a0<\/span><\/p>\n For those who don\u2019t know, Wrapped Bitcoin<\/a><\/span> (WBTC) is the 23rd largest cryptocurrency, with a market cap of $3.5 billion. It runs on Ethereum<\/a><\/span>, the leading blockchain for DeFi<\/span><\/a> and NFTs<\/a><\/span>, and is a token that is meant to represent Bitcoin.\u00a0<\/span><\/p>\n The idea\u2014mostly\u2014with WBTC is that traders who want to use their Bitcoin<\/span><\/a> holdings in the Ethereum<\/span><\/a> ecosystem can do so with tokens that are one-to-one backed by Bitcoin. It\u2019s how Bitcoin holders can interact with DeFi tools without spending more money on Ethereum or other Ethereum-based tokens.<\/span><\/p>\n <\/p>\n It\u2019s an important tool in the world of DeFi\u2014financial products that allow their users to borrow, lend, or trade digital assets without third-party intermediaries. In the past 24 hours, over $88 million-worth of WBTC tokens traded hands, according to CoinGecko.\u00a0<\/span><\/p>\n But last week the token depegged, losing its one-to-one value to Bitcoin, blockchain-data firm Kaiko <\/span>said<\/span><\/a>. Since FTX blew up at the start of November, WBTC has traded on exchanges at a discount to Bitcoin, it reported\u2014something which isn\u2019t supposed to happen if the token is pegged one-to-one by the largest cryptocurrency.\u00a0<\/span><\/p>\n \u201cThe largest wrapped version of bitcoin on the Ethereum network, WBTC, has traded at a persistent discount to BTC since mid-November, dipping to -1.5% on Friday,\u201d the firm wrote in a Monday blog post.\u00a0<\/span><\/p>\n \u201cWhile one WBTC should always be redeemable for one BTC through official merchants, the token also trades on open markets, which means its price relative to BTC can fluctuate.\u201d<\/span><\/p>\n