What is Wrapped Ether?

Wrapped Ethereum, or wETH, is a version of Ethereum that has been "wrapped" with a set of standards called ERC-20.

This means that wETH has the same value as Ethereum, and is safe to trade and invest in. Think of it like a stablecoin, which is a cryptocurrency that is backed by another asset, in this case, Ethereum.

There are also wrapped versions of other cryptocurrencies, like Bitcoin. Wrapped tokens solve a problem where different blockchains cannot normally use each other's coins.

By wrapping the coins, they can be used on other blockchains. If you want to unwrap your wETH tokens and get your Ethereum back, you can do so easily by sending them to a smart contract on the Ethereum network.

Quick facts

• wETH is a tokenized version of Ethereum that is "wrapped" with ERC-20 standards.

• wETH has the same value as Ethereum and is pegged to the price of ETH at a 1:1 ratio.

• Wrapped tokens solve interoperability issues between different blockchains.

How does wrapped ETH work?

WETH is a type of cryptocurrency that is different from Ether.

You can't use WETH to pay for fees when you use the network, but you can use it to invest and stake on certain websites. WETH is also used on OpenSea to buy and sell things through auctions.

To get WETH, you need to send Ether to a special computer program called a smart contract. The smart contract will then give you WETH. The Ether that you sent is locked up to make sure there's enough to back up the WETH.

If you want to get your Ether back, you can trade your WETH for Ether. When you do that, the WETH you traded will be destroyed so that the value of WETH stays the same as Ether.

The point of WETH is to make it easier for different parts of the Ethereum network to work together.

Eventually, Ethereum will be updated so that it doesn't need WETH, but for now, it's useful for things like buying and selling things and lending money. Ethereum is always getting better, and one day it might not need WETH at all.

What is Wrapped ETH used for?

At first, it can be confusing why we have a token called WETH when we already have ETH on the Ethereum blockchain.

The reason for this is that not all tokens on Ethereum work the same way. Developers can create new rules for each type of cryptocurrency, and one example of this is the ERC-721 format that gives us NFTs.

ETH is great for paying fees on Ethereum, but it can't be used in every DApp. Most DeFi DApps accept ERC-20 tokens for investing and staking.

If we want to use ETH for these purposes, it's easier to have it in an ERC-20 version, like WETH. This makes it more compatible across the blockchain and saves time creating new smart contracts.

Who invented Wrapped ETH?

Wrapped Ether, or wETH, was created by a group of projects led by 0x Labs to make using Ethereum easier and more secure.

0x Labs is a company with a team of experts from various well-known companies like Google, Microsoft, Spotify, and more. The team is diverse and mission-driven, and they work remotely from all around the world, including Africa, Asia, Australia, Europe, North and South America.

As pioneers in the field, they have made important contributions to Ethereum standards, including creating the NFT token standard.

What influences wrapped ETH's price?

Several factors can influence the price of Ether, the cryptocurrency used on the Ethereum network. Here are some of the main ones:

Supply and demand

Like any asset, the price of Ether is influenced by how much people want to buy it and how much of it is available for sale. If there are more buyers than sellers, the price will go up, and if there are more sellers than buyers, the price will go down.

Investor sentiment

The sentiment of investors and traders can also influence the price of Ether. Positive news, such as a new upgrade or partnership, can increase demand for Ether and push up the price. Negative news, like regulatory crackdowns or security breaches, can reduce demand and lower the price.

Network usage

The Ethereum network is used for a variety of decentralized applications (DApps), including DeFi platforms, NFT marketplaces, and gaming applications.

As more people use the network and its DApps, the demand for Ether to pay for gas fees increases, which can drive up the price.

Competition

Ethereum faces competition from other blockchain platforms, such as Cardano, Solana, and Binance Smart Chain. Any advancements or setbacks in these platforms can affect the demand for Ether and, therefore, its price.

Overall market conditions

The cryptocurrency market as a whole can also influence the price of Ether. If there is a bull market and investors are optimistic about cryptocurrencies, the price of Ether (and other cryptocurrencies) tends to go up. Conversely, during a bear market, when investors are more cautious, prices tend to fall.

Wrapped Ether (WETH) vs Ethereum (ETH)

Both Ethereum (ETH) and Wrapped Ethereum (WETH) have the same value, so neither one is better than the other. However, the decision to use one over the other depends on your specific needs.

If you want to buy a product or service online, using ETH may be better.

On the other hand, if you want to purchase cryptocurrencies that are based on other blockchain networks, like Bitcoin, you may need to use WETH.

This is because WETH can be used as a bridge between different blockchain networks, enabling the transfer of value across these networks.

Additionally, WETH can be used on Ethereum-based decentralized applications (dApps) and platforms, where it has become a widely accepted form of payment.

Ultimately, the choice between using ETH or WETH depends on your specific use case and the requirements of the application or platform you are using.

How To Buy WETH?

To buy MATIC , you will need to:

1. Set up a wallet that supports the storage of WETH. Some options for WETH wallets include MetaMask, Trust Wallet, and Ledger Nano.

2. Find a cryptocurrency exchange that supports the purchase of MATIC. Some popular exchanges that offer Polygon include Binance, Bitfinex, and Kraken.

3. Create an account on the exchange of your choice and complete the necessary identity verification processes.

4. Deposit funds into your account using a payment method supported by the exchange.

5. Search for WETH on the exchange and place an order to buy it using the funds in your account.

6. Once the order is complete, WETH will be credited to your account on the exchange. Make sure to transfer it to your wallet for safekeeping.

It is important to note that the process for buying WETH may vary slightly depending on the exchange you are using. Be sure to carefully read and follow the instructions provided by the exchange to ensure a smooth and secure transaction.

Final Thoughts on Wrapped Ether

Wrapped tokens, like WETH and WBTC, make it possible for people to use their cryptocurrencies on different blockchains. For example, someone who wants to use Ethereum on a different blockchain, like Avalanche, can use Wrapped Ethereum to do that. This makes it easier to move assets between blockchains, which can make it faster and cheaper to trade cryptocurrencies.

People also use wrapped tokens to earn more money on their investments. For example, if someone owns Bitcoin but wants to earn more interest on it, they can "wrap" their Bitcoin into a token like Wrapped Bitcoin and use it in DeFi activities like yield farming.

However, wrapping coins comes with some risks. People have to trust a third-party (a custodian) to hold onto their wrapped tokens, which can be hacked or have other problems. Plus, not every token can be wrapped on every blockchain, so people have to be careful about where they wrap their tokens.