Wrapped Ether (WETH) - what is ETH and how it works

Why convert Ether (ETH) into Wrapped Ether (WETH)? It turns out that "twin" one of the most popular cryptocurrencies has many more uses and you can earn more on it. Is it profitable to wrap Ether and, above all, for what specific purpose and how to do it? We check.

We are continuing the cycle of the Forex Club portal in which we analyze and describe the largest, highest-valued, most interesting, most developing, advanced and also the most controversial cryptocurrency projects around the world. Today it's time for Wrapped Ether (WETH) - a token that provides much more possibilities than Ether (ETH). Applicable both on various blockchains and on the DeFi decentralized finance market.

What is Wrapped Ether (WETH)

Wrapped Ether (WETH) is nothing but ordinary Ether (ETH)but converted into another token via wrapping. It can also be easily undone and converted back to the original ETH. Cryptocurrencies are converted 1: 1 with smart contract and are subject to small transaction fees. Both for wrapping and unwinding.

Thanks to Ether's wrapping (ETH), you can use the entire DeFi ecosystem in the Ethereum network with greater stacking options, but also actively invest in the full range of the cryptocurrency world. What's more, ETH can also be invaded by others blockchainach and buy for them inconvertible NFT tokens, which are still rapidly gaining popularity, as well as participate in the cryptocurrency loan system and provide liquidity in the so-called liquidity pools. An added bonus of WETH is the fact that it supports it or will handle most wallets such as Dappradar or Trust wallet.

Why bother with ETH at all?

Above all, ETH cannot be used in all decentralized applications. Nor can they be used in some of the liquidity pools or used to hedge other transactions. So let's convert them into another ERC-20 token to gain access to virtually unlimited opportunities on the cryptocurrency market. But how to do it? 

You need to send your ETH to a smart contract that will convert it to WETH. It is secured with ETH reserves, which are blocked in the smart contract and can be exchanged for WETH at any time. It is the same way the other way. 

WETH can also be obtained by exchanging on the cryptocurrency exchange. This is important because WETH can be used on Binance Stock Market and BNB Smart Chain (BSC), buy DeFi projects for them. 

You can also add them to the liquidity pool on the other Cryptocurrency exchangessuch as on the decentralized Uniswap exchange. However, you must remember about the so-called impermanent repaymentespecially in pairs with less liquid tokens. 

Another application of WETH is using them on the Aave platform for loans. Once deposited, you will earn interest on them until you withdraw your deposit. WETH tokens are gaining more and more applications almost overnight, especially in DeFi projects. 

Cryptocurrency Quote Wrapped Ether (WETH)

The Wrapped Ether (WETH) cryptocurrency is secured with smart contracts to keep it at the same price as Ether (ETH). Only then would a 1: 1 replacement make sense. As of March 23, 2022, it can be traded on six cryptocurrency exchanges around the world. The token, existing only since the beginning of February 2022, peaked on February 10, 2022, when each Wrapped Ether was paid $ 3.291,95.