Wrapped BTC and on-chain loans (cbBTC, WBTC, Morpho, Aave)

Convenience loans often wrap BTC and move it to a smart contract. Know wrapper, bridge, and protocol risk.

What wrapping means

Products like Coinbase Borrow (Morpho) convert BTC to cbBTC on Base. Aave paths often use WBTC on Ethereum.

You add wrapper issuer risk, bridge or chain risk, and smart-contract risk on top of price risk.

Is collateral still native BTC? Who can liquidate? Is there a grace period? Are proceeds USD or a stablecoin?