Bridged Wrapped Ether (x Layer) (WETH)

Bridged Wrapped Ether (x Layer), with ticker WETH, is a type of token that allows for the seamless trading of Ether (ETH) with other ERC-20 tokens on decentralized platforms. WETH serves as a standardized format for all tokens traded on these platforms, ensuring compatibility and preventing any loss of tokens during transactions. Unlike traditional wrapping, where physical assets are encased, wrapping ETH involves trading it for an equal amount of the wETH token through a smart contract. If users want to revert to plain ETH, they can “unwrap” the wETH by trading it back.

ETH, being the native currency of the Ethereum blockchain, predates the development of the ERC-20 standard. This standard was designed to define how tokens are transferred and maintain consistent records of token transfers within the Ethereum Network. ETH cannot be directly traded with other ERC-20 tokens without conforming to this standard. By using wETH, users can freely trade with anyone holding an ERC-20 token, enabling greater liquidity and accessibility on decentralized platforms like Radar Relay.

The future of WETH is uncertain as steps are being taken to update the ETH codebase and make it compliant with its ERC-20 standards. Additionally, alternative token standards like ERC223 are being developed to address existing problems and offer potential improvements. Ultimately, the goal is to eliminate the need for WETH and enable the direct trading of ETH with other tokens without the interoperability constraints currently imposed by different token formats.