Wrapped Bitcoin (WBTC) is the first ERC20 token backed 1:1 with Bitcoin.
So there must be a mechanism to lock BTC in the Bitcoin network and mint WBTC in Ethereum. I read about custodians and merchants which are part of that mechanism. So can I also swap BTC to WBTC, or actually this flow is centralised?
The custodians hold funds on BTC and mint / burn WBTC on Ethereum. They are centralized entities, and when you deposit BTC with one of them, you are trusting their servers and software to issue you the corresponding amount of ERC20 tokens at the market rate.
The major difference with traditional custodians is that you can verify the BTC held in trust (i.e. you can perform your own audit) using this dashboard https://www.wbtc.network/dashboard/audit
The largest custodian holds about 520 BTC at the time of this writing (more than 4m USD), and you can inspect all of its incoming and outgoing transactions on BTC https://blockstream.info/address/3ANaBZ6odMrzdg9xifgRNxAUFUxnReesws
to try and correlate them with the WBTC contract on Ethereum https://etherscan.io/token/0x2260fac5e5542a773aa44fbcfedf7c193bc2c599
The Etherscan contract says it has a "Fully Diluted Market Cap" of $4,676,998.42 in outstanding issued WBTC tokens.
Compared with the wbtc.network total of $4,720,890.03, so you would be able to track the ~$50k being settled.
If you are interested in actually wrapping your BTC for reasonable fees, there are currently 2 good options available:
Note that wbtc café uses RenVM and slippage might occur, while coinlist offers a fixed conversion rate.
Disclaimer: I am in no way affiliated with any of these 2 parties.
you can also use a decentralised option - Swingby. You can see the expected amount right in the swap widget, and you don't have to bother with trusting a centralised custodian or with KYC.
to add my 2 cents - now it seems the best non-custodial EX for lowest fees is on https://curve.fi/ren - it supports BTC to WBTC, everything else was more expensive.
