Wrapped Ether (WETH)

The wrapped variant of ether is known as WETH. Cryptocurrencies that have been tokenized and are tied to the value of the original coin can be unwrapped at any time. Examples of wrapped tokens are WETH and wrapped bitcoin.

A wrapped version of most major blockchain’s native coins are available. Such coins operate in a manner akin to stablecoins. In the sense that dollar-pegged stablecoins may always be redeemed for FIAT dollars, stablecoins are effectively “wrapped USD.” Similar to wrapped currencies, WBTC, WETH, and any other wrapped coins can be exchanged at any time for the original asset.

The ERC-20 compliant form of ether is known as wrapped ether (WETH) (wrapping ether with other ERC standards is also possible). Ether can be used to create WETH by sending it to a smart contract, which will keep it and exchange it for the WETH ERC-20 token at a 1:1 ratio. This WETH can then be returned to the same smart contract to be “unwrapped” or redeemed at a 1:1 ratio for the original ether.

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