How to Bridge BTC to WBTC and Provide Liquidity on Uniswap

TeleSwap Team

— 4 min read
How to Bridge BTC to WBTC and Provide Liquidity on Uniswap

Meta Description: Bridge BTC to WBTC with TeleSwap and earn Bitcoin yield by providing liquidity on Uniswap. Step-by-step guide for DeFi on Ethereum, Polygon, Arbitrum, Optimism.

Introduction: Turn Idle BTC into Productive DeFi Capital

Bitcoin (BTC) is sound money—but it isn’t natively programmable. To earn yield or use decentralized exchanges (DEXs), BTC holders first move into Wrapped BTC (WBTC) on an EVM chain. Bridging BTC to WBTC with TeleSwap unlocks Bitcoin DeFi: you can trade on a decentralized exchange, supply liquidity on Uniswap, and collect fees. In this guide, you’ll bridge BTC → WBTC and then provide liquidity on Uniswap—on Ethereum, Polygon, Arbitrum, or Optimism—so your Bitcoin can start earning.

What Is WBTC (Wrapped BTC) and Why It Matters

WBTC is an ERC-20 token representing BTC 1:1 on Ethereum and other EVM networks.

  • BTC → WBTC: Lock BTC on Bitcoin, mint WBTC on an EVM chain.
  • WBTC → BTC: Burn WBTC and release BTC back on Bitcoin.

With WBTC you can:

  • Trade on DEXs like Uniswap.
  • Provide liquidity and earn fees (a form of Bitcoin yield).
  • Use DeFi money markets and cross-chain tools.

Result: your Bitcoin becomes usable and yield-bearing across the EVM ecosystem.

Why Use TeleSwap for BTC → WBTC

Most “wrapped” routes rely on centralized custodians and slow withdrawals. TeleSwap is a decentralized Bitcoin bridge designed to minimize trust while maximizing usability:

  • Non-custodial architecture: BTC secured in decentralized, collateralized vaults (multi-sig/locker model).
  • Cross-chain coverage: Ethereum, Polygon, Arbitrum, Optimism, Base, BNB Chain, and more.
  • Fast settlement: Finalization typically in minutes, without exchange withdrawal delays.
  • Direct path to liquidity: After bridging, you’re one click from adding WBTC to Uniswap pools.

Learn more in the TeleSwap documentation.

How to Bridge BTC to WBTC with TeleSwap (Step-by-Step)

  1. Open the app & connect wallets: Go to app.teleswap.xyz and connect your Bitcoin wallet (e.g., UniSat or Xverse) and your EVM wallet (e.g., MetaMask).
  2. Choose destination network: Select Ethereum, Polygon, Arbitrum, or Optimism based on fees and where you plan to provide liquidity.
  3. Enter BTC amount: Specify how much BTC to bridge. The interface will show you the estimated WBTC you’ll receive.
  4. Send BTC: Send your BTC from your Bitcoin wallet.
  5. Receive WBTC: After confirmations, WBTC lands in your EVM wallet on the chosen chain—ready for DeFi.
Tip: L2s like Arbitrum, Optimism, and Polygon offer lower gas costs when you later add liquidity on Uniswap.

Provide Liquidity on Uniswap (WBTC Pairs)

Uniswap is the leading EVM DEX using an Automated Market Maker (AMM) and, in v3, concentrated liquidity. You deposit two assets into a pool (e.g., WBTC/ETH or WBTC/USDC). Traders pay a fee (0.05%–1%); LPs earn their pro-rata share.

Step-by-Step on Uniswap

  1. Open Uniswap: Visit app.uniswap.org and switch to your target network (Ethereum, Polygon, Arbitrum, or Optimism).
  2. Pick a pool & fee tier: Choose a WBTC pair. Common choices: WBTC/ETH (correlated crypto pair) or WBTC/USDC (lower volatility).
    • Consider fee tiers: 0.05%, 0.3%, or 1% (see Uniswap v3 overview). Higher tiers suit more volatile pairs.
  3. Choose your price range (v3): Concentrate your liquidity around the price range where you expect most trading. Narrow ranges can boost fees/APR but require rebalancing if price moves.
  4. Deposit tokens: Add equal value of WBTC and the paired asset. Confirm the transaction in your EVM wallet.
  5. Track and manage: You’ll receive an NFT representing your LP position. Monitor fees, consider re-centering your price range, and compound by reinvesting fees.
Tip: For simpler exposure and reduced volatility risk, WBTC/USDC on an L2 is a popular starting point.

Worked Example (Illustrative)

You bridge 0.1 BTC → 0.1 WBTC on Arbitrum via TeleSwap, then add liquidity to WBTC/USDC at 0.05% fee tier with a moderately wide price range.

  • Deposit: 0.1 WBTC + equivalent USDC.
  • Volume environment: If daily volume is healthy and your position sits in-range, you accrue a portion of fees proportional to your share of active liquidity.
  • Outcome: Fees are earned in the pool assets (WBTC/USDC), representing BTC-denominated yield over time.

Actual returns vary with volume, fee tier, position width, pool depth, and price path. Always model scenarios and start small.

Risks & How to Manage Them

  • Impermanent Loss (IL): Divergence in WBTC vs. the paired asset can reduce your position value relative to holding.
    • Mitigate: Prefer WBTC/USDC for lower volatility; use wider ranges; rebalance thoughtfully.
  • Smart-contract & integration risk: AMMs and bridges carry code and integration risks.
    • Mitigate: Use reputable protocols (Uniswap, TeleSwap), keep software up to date, and avoid unverified contracts.
  • Gas & operational costs: L1 gas can erode yields on small positions.
    • Mitigate: Favor L2s (Polygon, Arbitrum, Optimism); bundle changes; avoid over-management.
  • Liquidity fragmentation: Multiple pools/fee tiers can dilute volume.
    • Mitigate: Prefer pools with healthy TVL and volume on your network.

Conclusion: Make Your Bitcoin Work on DEXs

By bridging BTC to WBTC with TeleSwap and adding liquidity on Uniswap, you convert idle BTC into a yield-generating asset—on the networks you already use (Ethereum, Polygon, Arbitrum, Optimism). The path is straightforward:

  1. Bridge with TeleSwap. 2) Pick a WBTC pool and fee tier. 3) Provide liquidity and manage your range.

Ready to start? Explore TeleSwap now and put your Bitcoin to work in DeFi.

FAQ

1) BTC vs. WBTC—what’s the difference?

BTC lives on the Bitcoin chain; WBTC is an ERC-20 representation on EVM networks, backed 1:1, enabling use in DeFi (DEXs, lending, liquidity).

2) Is TeleSwap non-custodial?

TeleSwap uses decentralized, collateralized vaults and multi-sig mechanisms described in the TeleSwap docs to minimize centralized custody risk. No system is risk-free; assess carefully.

3) Can I go from WBTC back to native BTC?

Yes. Burn WBTC and receive native BTC via the TeleSwap unwrap path (WBTC → BTC).

4) Which networks are best for Uniswap liquidity?

For lower gas and active markets, Arbitrum, Optimism, and Polygon are popular. Ethereum mainnet offers deep liquidity but higher gas.

5) How do fee tiers affect yield?

Higher fee tiers (e.g., 1%) can earn more per trade but may see lower volume; lower tiers (e.g., 0.05%) suit correlated or stable pairs. Match tier to volatility and volume.

6) How do I reduce impermanent loss?

Favor WBTC/USDC, use wider ranges, and avoid narrow bands unless you can actively manage and rebalance.

Read more