Wrapped bitcoin is a token on another chain that stands for BTC held somewhere else. WBTC, cbBTC, tBTC and LBTC all fit that description. They differ in the part that matters for pricing: who holds the coins and who is allowed to turn tokens back into BTC. That answer decides what “parity with BTC” rests on for each one. For WBTC it rests on a custodian and a set of authorized merchants. For cbBTC it rests on Coinbase as custodian. For tBTC it rests on a rotating group of signers. LBTC is a different case: Lombard designs it as a yield-bearing token whose exchange rate to BTC rises, so it is not designed to hold at one for one.
What a wrapper promises
Bitcoin cannot run smart contracts, so DeFi uses tokens on other chains that represent it. Three of these four promise that one token can be exchanged for one BTC. Two things keep that promise. The BTC has to exist behind the token. And someone has to be able to create or redeem the token at that rate, because redemption is what lets trading pull the market price back toward one.
The designs below arrange both parts differently. The facts come from each issuer’s own documents, read on 23 October 2026.
The four at a glance
| Token | Mint and redeem | Holds the BTC |
|---|---|---|
| WBTC | Authorized merchants | A custodian |
| cbBTC | Coinbase customers | Coinbase |
| tBTC | Bridge contracts | Signer wallets, 51 of 100 |
| LBTC | Deposit, or burn within 10 days | Custodians and a 14-member consortium |
WBTC: merchants, a custodian and a DAO
The WBTC whitepaper of 2019 splits the roles three ways. A custodian holds the BTC and the keys to mint tokens. Merchants hold keys to initiate minting and burning. A DAO, acting through a multi-signature contract, controls contract changes and adds or removes custodians and merchants. In the design, a retail user goes through a merchant, who performs the identity checks.
The current FAQ describes the same loop. WBTC is minted when BTC is deposited through an authorized merchant and the custodian verifies and releases it. WBTC is burned when a user redeems through an authorized merchant, after which the custodian releases the BTC. The home page says that identity-verified institutions approved through DAO governance are the ones that mint and burn.
For verification, WBTC runs a proof of reserves page. It carries a monitor that compares WBTC in circulation with BTC reserves, supply by authorized chain, the custodian’s Bitcoin addresses and a record of mints and burns.
One dated fact belongs to the structure. On 7 October 2026 WBTC published a post saying it is exploring a multi-custodian model for its Bitcoin reserves, moving away from a single-custodian setup. The post says details of the selected custodians will follow on the WBTC website and that minting and redemption are unchanged.
cbBTC: one issuer, one custodian
Coinbase issues cbBTC and holds the BTC behind it. Its page says the backing is 1:1, held in custody by Coinbase and not sold, transferred or used for any other purpose. Coinbase’s Q3 2024 shareholder letter records the introduction of cbBTC in that quarter.
The mint path runs through a Coinbase account. A customer sends BTC from Coinbase to an address on a supported network and it converts automatically at one for one. To redeem, the customer deposits cbBTC into a Coinbase account and it converts back. Coinbase states that wrapped assets have no separate order book or trading pair on Coinbase. The path is open to customers in good standing located in the US (excluding New York State), the UK, EEA states, Singapore, Australia and Brazil.
Coinbase calls its reserve check proof of reserves. The BTC sits in dedicated addresses that Coinbase shares publicly, so users and third parties can verify them. Coinbase also notes that the reserve can exceed supply because of timing differences in ledger updates, delayed transactions, network fees or movements between hot and cold wallets. The issuer’s table lists Base, Ethereum, Solana and Arbitrum.
tBTC: a signer network instead of a company
Threshold describes tBTC as a decentralized and trust-minimized bridge. The mechanics: you deposit BTC to a deposit address, then mint the ERC-20 token. Deposits are swept into a single Bitcoin output, which the docs say typically happens every 8 hours. Redemption burns the token and returns BTC through the same bridge.
The BTC is secured by wallets, not by a company. Each wallet has 100 signers chosen by a sortition pool and 51 of them must cooperate to sign. A signer’s chance of selection equals their share of the stake. A new wallet is created every 14 days. Threshold says the operator selection rotates bi-weekly. Its documents state an honest majority assumption: operators need a threshold majority to agree before they can act on deposited Bitcoin.
Threshold’s own pages use two vocabularies here. The bridge carries the subtitle “A Decentralized, Permissionless Bitcoin Bridge”. The signers page says signer nodes “form a permissioned set”. The docs add that a faster minting path, called optimistic minting, relies on permissioned sets of Minters and Guardians: any one Minter can request minting. During a delay any one Guardian can cancel it. In the docs’ own terms, then, tBTC has a permissionless minting and redemption path with a permissioned signer set.
Minting and redemption carry a fee of 0.2%. Threshold’s docs say it was reinstated on 15 April 2026 after a governance decision.
LBTC: a wrapper that is meant to drift from one
LBTC needs the closest reading, because its description changed in 2026. Lombard’s docs say the BTC behind LBTC was staked to Babylon until 13 August 2026. From 17 August 2026 the yield source is an institutional covered-call options strategy on Bitcoin managed by Bitwise Investment Manager, LLC. Lombard says the token contract, the mint and redeem logic, the proof of reserve attestations and the 10-day redemption window did not change.
LBTC is non-rebasing. Yield is not paid out and nothing needs claiming. It shows up in the exchange rate between LBTC and BTC. Lombard writes that the rate might start at 1.00 and appreciate, for example to 1.01 or 1.02. It reflects the value of the backing, including the mark-to-market value of open options positions. Lombard’s FAQ puts the consequence plainly: one LBTC is worth more than one BTC. That is the sense in which LBTC is not designed to hold one for one.
Redemption follows the same logic. The protocol burns LBTC and sends native BTC at the current exchange rate within a window of at most 10 days. Lombard says it is not instant. Lombard also lists a second risk: the market price on DEXs and lending protocols may temporarily diverge from the exchange rate.
The custody has two parts. Lombard describes an actively deployed portion held at two qualified custodians in segregated accounts under tri-party agreements, with Bitwise holding trading authority without custody. A passive portion stays with the Security Consortium, 14 members of which at least 10 must sign any protocol action. Direct mint and redeem and the yield strategy are not available to US or UK persons or other restricted jurisdictions.
Lombard also issues BTC.b, which its docs describe as a strict 1:1 non-yield Bitcoin wrapper. The wrapper in Lombard’s range that targets one for one is BTC.b, not LBTC.
Chains and units
Chain lists change, so read the issuer’s current list before you assume a token exists where you need it.
- WBTC: the transparency page lists seven authorized chains, among them Ethereum, Solana, Tron and Base, while the FAQ speaks of availability on more than 25 blockchains.
- cbBTC: Base, Ethereum, Solana and Arbitrum.
- tBTC: Ethereum plus Arbitrum, Base, BOB, Optimism, Polygon PoS, Solana, Starknet and Sui. Several of these versions are bridged through a Wormhole gateway; Starknet uses its own bridge.
- LBTC: ten chains with mint and redeem. On 16 September 2026 Lombard deprecated native minting and redemption on TAC, Sonic, Katana, Berachain and Starknet. Holders on four of them are asked to bridge to Ethereum by 10 December 2026.
A unit note for anyone integrating. On Ethereum mainnet, a read of each contract’s decimals function on 23 October 2026, through one public endpoint, returned 8 for WBTC, cbBTC and LBTC and 18 for tBTC. The LBTC contract’s on-chain name still reads “Lombard Staked Bitcoin” while the docs call the token Lombard Bitcoin, so do not infer the yield source from the name.
What to read for each one
Each design points to a different thing to watch:
- WBTC: the authorized merchant and custodian set, including the multi-custodian change announced on 7 October 2026. Holders outside that set exit by selling.
- cbBTC: Coinbase’s custody and the list of jurisdictions that can use direct redemption. Holders outside it also exit by selling, so for them parity is a market outcome.
- tBTC: the signer rotation, the fee and the Minter and Guardian sets. Parity rests on the redemption path staying open.
- LBTC: two numbers, the protocol exchange rate and the market price. A market reading above one is consistent with the design.
On ML Data’s BTC parity board, WBTC is the reference unit and the other wrappers are read against it. For LBTC that reading sits next to an exchange rate that Lombard itself puts above one, so a reading above one can be the design. The wrapped bitcoin prices page collects the tokens in one place. Each has its own page: WBTC, cbBTC, tBTC and LBTC. For how those pages measure on-chain prices, see DEX-native price feeds explained.
Sources
- Wrapped Tokens: A multi-institutional framework for tokenizing any asset (WBTC whitepaper)
- Frequently Asked Questions, WBTC
- Proof of Reserves, WBTC
- WBTC Announces Exploration of Multi-Custodian Bitcoin Reserves
- Coinbase cbBTC
- Coinbase Wrapped BTC Proof of Reserves
- Q3’24 Shareholder Letter, Coinbase (SEC)
- tBTC Bitcoin Bridge, Threshold docs
- Wallet Generation, Threshold docs
- tBTC Signers, Threshold docs
- tBTC optimistic minting, Threshold docs
- Assets, LBTC and BTC.b, Lombard docs
- LBTC FAQ, Lombard docs
- Risks, Lombard docs
- Chain Support Update, September 2026, Lombard docs
