Buy Wrapped ETH (WETH)

What is WETH?

WETH, or Wrapped Ether, is a tokenized version of Ether (ETH), the native cryptocurrency of the Ethereum network. It is pegged to the value of ETH 1:1 and enables increased interoperability between Ethereum and other blockchain networks by conforming to the ERC-20 token standard.

How does WETH work?

WETH works by "wrapping" ETH into an ERC-20 token. This involves sending ETH to a smart contract that locks up the ETH and mints an equivalent amount of WETH. This process allows the wrapped version to be used in various decentralised applications (dApps) and exchanges that require ERC-20 tokens. Users can unwrap WETH back into ETH by reversing this process through the smart contract, which burns the WETH and releases the corresponding ETH.

What are the potential use cases for WETH?

WETH has several use cases, particularly in the realm of decentralised finance (DeFi):

• Trading on Decentralised Exchanges (DEXs): WETH is commonly used on platforms like Uniswap and SushiSwap for trading pairs.
• Providing Liquidity: Users can contribute WETH to liquidity pools on DEXs and earn fees.
• Collateral in Lending Platforms: WETH can be used as collateral on protocols like Aave and Compound.
• NFT Trading: Since many NFT marketplaces accept WETH, it can be utilised in buying and selling non-fungible tokens.
• Crypto Lending and Staking: WETH can be employed in various lending and staking strategies within DeFi.

What is the history of WETH?

WETH was developed in 2017 to solve interoperability issues among different dApps and DEXs on Ethereum. The concept was proposed and implemented by teams like those from MakerDAO, 0x, and Gnosis. It gained immediate popularity due to its ability to make ETH compatible with ERC-20 tokens, which greatly enhanced its utility in DeFi applications. Over the years, WETH has become integral to liquidity provision and cross-chain interactions within the DeFi ecosystem.