Can WETH Crypto Price Witness $25k by the year 2030?

What are Wrapped Tokens?

Wrapped tokens are basically a token representing a crypto asset from another blockchain or token standard but do not alter with the original value of the cryptocurrency. The difference between the original crypto and the wrapped version is that the latter can be used on non-native blockchains and can be later redeemed for the original cryptocurrency. And also facilitates building a bridge between the networks. 

A significant issue that the Wrapped version of tokens takes care of is that they provide great interoperability among different blockchain and cryptocurrencies. Wrapped crypto tokens can represent a wide range of tokens, including arts and collectibles, commodities, equity, stocks, crypto-assets, etc. Almost all significant blockchains have a wrapped version of their cryptocurrencies, for instance, Wrapped Bitcoin (WBTC), Wrapped Ethereum (WETH), Wrapped BNB (WBNB), Wrapped AVAX (WAVAX), etc.

There exist two types of Wrapped Tokens, cash-settled and redeemable. Cash-settles tokens cannot be redeemed using the underlying asset. Whereas, Redeemable tokens allow the users to redeem to exchange the wrapped token with the underlying asset. 

Although these Wrapped tokens do have some loopholes like wrapping coins means investors have to get involved with a custodian that may have some risks, DEXs may have smart contract risks, and the custodians can get hacked. Hence, an entirely secured decentralized solution for wrapped tokens cannot be assured.  

What is Wrapped Ethereum (WETH)?

WETH is the Wrapped version of Ether. It is a tokenized version of Ethereum (ETH) pegged to the value of ETH. 

Wrapped Bitcoin aims to port Bitcoin on other non-native Blockchains, and it supports Ethereum and Tron as of now. But Wrapped Ethereum has the purpose of trading synthetic Ethereum on the Ethereum Blockchain.  

What was the need for Wrapped Ethereum (WETH)?

Most of the fungible tokens on the Ethereum blockchain follow the ERC 20 token standard. These token standards act as a set of rules for the tokens to follow to ensure that they are compatible with other Ethereum based services and platforms. Although, Ether itself does not conform to all its token standards. The major difference between WETH and ETH is that the former follows the ERC-20 standard while the latter does not. 

WETH was developed to increase the interoperability among blockchains and make Ether available for use on Decentralised Applications (DApps). It facilitates the Ethereum (ETH) holders to have new opportunities in the world of Decentralised Finance (DeFi). It was created to cut down the need for an intermediary and, without the risks like unexpected errors from complex implementations during transactions, to swap ETH with other ERC-20 tokens. 

Although, the creators of WaETH are trying to work on making Ethereum compatible with its own ERC-20 standard, hence eliminating the need for WETH. And they are also working further to update the ERC-20 standard. 

WETH is available on some of the top cryptocurrency exchanges like UniSwap, PancakeSwap, SpookySwap, etc. However, investors should do thorough research before starting to trade WETH crypto about the WETH crypto price, transaction fee, specific requirements, etc. 

The Working Mechanism of Wrapped Ethereum (WETH)

Wrapped Tokens need a Custodian who can hold the collateral. These Custodians can be anyone, including a merchant, multi-signature wallets, or a smart contract. Simply put, the custodian will hold your Ether and provide you with the wrapped version (WETH) in return. You don’t need to mainly wrap Ethereum; you can trade ETH by WETH via a smart contract or a digital wallet like MetaMask. 

On the Ethereum Blockchain, Wrapped Ethereum is required to swap between tokens on decentralized Applications (DApps). There are certain Decentralised Applications that do not work with Ether as collateral, and they require wrapped Ethereum. WETH is an ERC-20 standard token that can be used in exchange for other ERC-20 tokens on DeFi applications. 

WETH crypto actually facilitates more trade volume on the Decentralised exchanges because it makes it easier for the investors to swap Wrapped ethereum for any other ERC-20 standard token. The WETH investors can stake their tokens on DeFi protocols and can trade their WETH tokens for other altcoins based on the Ethereum blockchain. 

Liquidity is a common term used in the world of finance, which means the ease by which a particular asset can be converted into cash. Liquidity pools are one of the primary technologies behind the Decentralised Finance industry. They are vital parts of borrow-lend protocols, Automated Market Makers (AMM), synthetic assets, yield farming, blockchain gaming etc. It is basically a collection of funds locked in the smart contracts. Users can even add their funds to yield-generating platforms and further generate yield. The tokens are distributed algorithmically to participants who put their tokens in these liquidity pools. And the newly minted ones are distributed in proportion to their share of the pool.

There are varied pairs available on exchanges providing different liquidity depending upon the pair. For instance, USDC and WETH pair on Sushiswap have $198,389,704 as total value locked, providing around 26% Annual percentage rate and approx 4,630 Sushi rewards. 

Also Read: Looking forward to buying Maker Token (MKR) on Bitfinex

Features of Wrapped Ethereum (WETH)

• WETH allows the token to operate on the other Blockchains as well. Hence, increasing the blockchain’s liquidity and capital efficiency as it enables the investors to wrap assets and incorporate them on other chains. 

• Wrapped coins can also allow lesser transaction time and fee. Because Ethereum has higher gas fees, the wrapped version facilitates the investors to trade Ether at a comparatively lower cost. 

• Versions of wrapped Ether (WETH) are available on significant blockchains like Avalanche, etc. 

WETH Crypto Price

At the time of writing, the WETH crypto price is $2,582.83 and stands at a 2829th position by market cap. The total current holders of WETH crypto are 452,608 in number. The token witnessed its All-time high in November last year when the price of WETH crypto reached $4816.4.

WETH Crypto Price Predictions

The Crypto industry often sees various price predictions by several entities. According to our research and analysts, WETH crypto price might reach around $12k in the next five years.

Although these WETH crypto price predictions would prove to be precise or not is something to look at in the future. Let’s see if the team can manage to make Ether compatible with the ERC-20 token standard and whether the requirement of wrapped token for Ether ever fades or not. 

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational ideas only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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