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As introduced on the official website, to receive WBTC, users apply for tokens from the merchant, and then the merchant executes the required KYC/AML procedures and verifies the user's identity. After completion, the user and the merchant perform their exchange, the user's Bitcoin is transferred to the merchant, and the merchant's WBTC is transferred to the user.
The implications for Wrapped BTC and similar projects are obvious. It connects the DeFi field with the Bitcoin market. This also means that unless the holder of WBTC chooses to redeem it, Bitcoin held as collateral for WBTC is basically HODLized. As more BTC is HODLed, scarcity increases, which may have a positive impact on the price of Bitcoin.
About AAX Academy
AAX is a digital asset exchange supported by LSEG Technology. AAX Academy is a user education channel created by AAX, which aims to help more users learn novice tutorials and learn the basics of blockchain.