What Is Wrapped Ethereum (WETH)? A Beginner's Guide – Unchained


Wrapped Ethereum (ETH) enables ETH holders to wrap their tokens and use them in Ethereum’s decentralized finance market in accordance with the ERC-20 token standard.
The Ethereum blockchain’s native cryptocurrency, ether (ETH), follows different rules from those of the ERC-20 token standard. Wrapped Ethereum helps bridge this gap by offering a more versatile version of ETH.
Read on as we discuss Wrapped Ethereum, how to wrap and unwrap ETH, and the various use cases.
Wrapped Ethereum (WETH) is an ERC-20 token on the Ethereum blockchain pegged 1:1 to ETH.
ETH plays a critical role in the network by paying gas fees for transactions. However, with ERC-20 tokens following different rules, users cannot use their ETH in the same way as ERC-20 tokens.
WETH’s ERC-20 infrastructure opens this path, allowing compatibility across the blockchain and eliminating the need to develop new smart contracts.
ETH preceded the development of the ERC-20 standard, and the lack of compatibility means customized programming for each dApp, which can be costly. With the wrapping technology, an ERC-20 wrapper envelopes the ETH. This eliminates the need for custom programming to ensure compatibility with ERC-20 contracts. 
Here’s how you can wrap your ETH, turning it into WETH:
Instead of exchanging the WETH for your ETH, you can also use a crypto exchange such as Uniswap or SushiSwap to swap it for another token or cryptocurrency. 
WETH presents two key advantages: 
There are some risks associated with WETH: 
There are two key use cases for WETH: 
So far, we have only mentioned the Ethereum blockchain, which may leave you wondering if you can wrap ETH on other blockchains. At its core, wrapping technology aims to achieve interoperability. Therefore, it is possible to wrap Ethereum outside the native blockchain. 
Blockchains such as Polygon, Avalanche, and BNB Chain contain different versions of wrapped ETH.
Wrapped Ethereum provides a user-friendly way to bridge Ethereum’s native token and the blockchain ERC-20 token standard, enabling ETH to be used in wrapped form across the entire dApp ecosystem on Ethereum. 
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