What Is Wrapped Ether? An Informational Guide From Kucoin
People that are new to the cryptocurrency scene often ask what wrapped Ether or Ethereum is. With this guide from Kucoin, we will discuss what a wrapped ether is and also offer you some extra information regarding wrapped Ether. Kucoin is a great crypto trading platform where users can buy, trade, and sell cryptocurrencies such as KCS or TRX and also find out information regarding cryptocurrencies, such as Ethereum prices, bitcoin, and USDT exchange rates, and much more. Kucoin also offers exceptional security to its users and protects their assets along with their accounts. So let us discuss what a wrapped ether is:
What Is A “Wrapped Ether,” And How Is It Different From Normal Ether?
Wrapped Ether is also known as WETH, W stands for wrapped, and ETH is the Ethereum cryptocurrency’s initials. Wrapped ethers are the tokenized version of the Ethereum cryptocurrency, and users can unwrap them at any time. They have the same value as the original cryptocurrency from which they originate. WETH has a very similar function to stablecoins, as they both can be “exchanged” for the original currency at the real value.
What Is The Purpose Of Wrapped Ether?
The problem with normal cryptocurrencies is that they can not be used on other blockchains; they can only be used, traded, and sold on the blockchains they originate and exist. Wrapping cryptocurrencies solves this problem by increasing the interoperability of blockchains. Interoperability is the ability to access and share information across different blockchains. Normally, you can not use Ethereum on any other blockchains such as bitcoin, but wrapping the Ethereum allows you to use wrapped Ether on bitcoin’s blockchain.
Almost all Ethereum cryptocurrencies abide by the ERC-20 standard, which makes all the cryptocurrencies on the Ethereum blockchain comparable to one another. Still, Wrapped Ether does not abide by ERC-20 standards as its main goal is to increase the interoperability between different blockchains.
Wrapped Ether can, in some cases, reduce transaction fees compared to normal Ether.
Ether can be used to buy fuel in some places, but decentralized finance apps have ERC-20 tokens that can be exchanged for wrapped Ether as it is also an ERC-20 token.
How To Get Wrapped Ether?
To get a wrapped ether, you first need to own Ethereum’s token “Ether.” Afterward, you take the Ether to a custodian who will hold your Ether and, in return, will give you a wrapped Ether of the same value.
Who Are Wrapped Ether Custodians?
Wrapped ether custodians can be merchants, smart contracts, or even multi-signature wallets.
Ultimately, wrapped Ether is a tokenized form of Ethereum’s cryptocurrency Ether. Anyone can use wrapped Ether on different blockchains, and it also reduces transaction fees in certain cases. Users can get wrapped Ether from custodians who hold the users’ Ether and give wrapped Ether in return. Kucoin is a great platform to buy cryptocurrencies as it offers its users outstanding security using the latest technology in security systems.