What is WETH?
WETH (Wrapped Ether) is an Ethereum token that allows users to convert Ether into a standard ERC-20 token. It was created in 2018 by the team at 0x protocol and serves as a bridge between Ethereum and other decentralized exchanges (DEXs). The purpose of WETH is to allow ETH holders to use their coins on platforms that do not natively support the cryptocurrency, such as DEXs. By wrapping ETH into WETH, users can access more liquidity options than they would normally have when trading with only regular ETH tokens.
How Does Wrapping Work?
In order to create WETH, users must “wrap” their Ether using specialized smart contracts. This process involves sending ETH tokens from any compatible wallet address to the Wrap contract address provided by 0x protocol. Once the transaction is confirmed on the blockchain network, corresponding amount of WETH tokens are minted and sent back to user’s wallet address automatically. To unwrap or burn existing wrapped ether tokens, simply send them from your wallet address back to 0x Protocol’s wrap/unwrap contract addresses for conversion into regular ether again.
What Are The Benefits Of Using Wrapped Tokens?
There are several advantages of using wrapped tokens over regular ethereum:
• More Liquidity – Wrapping Ether provides access to much larger liquidity pools because it enables traders who don’t have direct access to each other’s wallets quickly exchange funds without having trust issues or counterparty risk concerns; • Lower Fees – As there’s no need for third party intermediaries like centralized exchanges involved in transactions made with wrapped tokens – fees associated with these transactions tend be significantly lower; • Increased Security – All transactions done via this method are backed up by Ethereum smart contracts which adds an extra layer of security compared with traditional methods; • Improved Accessibility – With wrappers like weth allowing people around world instant access crypto markets previously too difficult reach without expensive bank transfers or credit cards;
