What Is Wrapped Ethereum (WETH)?

Wrapped Ethereum (WETH) is an ERC-20-compliant version of Ether (ETH), designed to enhance interoperability across decentralized applications (DApps) and platforms supporting the ERC-20 standard. Pegged 1:1 to ETH, WETH ensures seamless conversion and broader utility within the Ethereum ecosystem.

👉 Discover how WETH powers DeFi applications

Understanding Wrapped Tokens

Wrapped tokens bridge incompatible blockchain standards by representing native assets in a compatible format (e.g., ETH as ERC-20). Key points:

• Minting Process: Locking native tokens (ETH) with a custodian generates wrapped tokens (WETH).
• Use Cases: Enables cross-chain functionality in DeFi, DApps, and liquidity pools.
• Standards: Adheres to token standards (e.g., ERC-20) for seamless integration.

What Is Wrapped Ethereum (WETH)?

WETH is ETH wrapped in an ERC-20 wrapper, retaining ETH’s value while expanding functionality:

• ERC-20 Compliance: Mandatory functions like transfer and approve ensure compatibility with DeFi protocols.
• Use Cases: Collateral, staking, and liquidity provision in DApps like Uniswap.
• Creation: Convert ETH to WETH via smart contracts or DEXs (e.g., Uniswap).

Advantages of WETH

• Interoperability: ERC-20 support for DeFi/DApp integration.
• 1:1 Peg: Maintains ETH’s value.
• Liquidity: Enhances capital efficiency in pools.

Disadvantages of WETH

• Custodial Risk: Reliance on custodians for wrapping/unwrapping.
• Centralization: Potential single-point failures.

ETH vs. WETH

| Feature | ETH | WETH |
|------------------|------------------------------|-------------------------------|
| Standard | Native (non-ERC-20) | ERC-20-compliant |
| Use Cases | Gas fees, transactions | DeFi, DApps, liquidity pools |
| Conversion | N/A | Wraps/unwraps via DEXs |

👉 Explore ETH’s role in Ethereum’s ecosystem

How to Wrap ETH into WETH

1. Connect Wallet: Use a Web3 wallet (e.g., MetaMask) on Uniswap.
2. Select Tokens: Choose ETH → WETH.
3. Confirm Wrap: Approve the transaction and pay gas fees.

Example:

• Input 1 ETH → Receive 1 WETH.

How to Unwrap WETH into ETH

1. On Uniswap: Select WETH → ETH.
2. Confirm Unwrap: Execute the transaction.

Note: Unwrapping reverses the 1:1 peg.

Impact of WETH on Blockchain

• DeFi Growth: Facilitates lending, staking, and yield farming.
• Interoperability: Bridges ETH with ERC-20 DApps.
• Liquidity: Boosts efficiency in decentralized exchanges.

FAQs

1. What is WETH used for?

WETH enables ETH usage in ERC-20-compliant DApps (e.g., lending protocols).

2. Can I convert WETH back to ETH?

Yes, via DEXs like Uniswap.

3. Is WETH safer than ETH?

Same value but depends on custodial trust for wrapping.

4. Why wrap ETH?

To use ETH in DeFi platforms requiring ERC-20 tokens.

5. Who issues WETH?

Smart contracts or custodians mint WETH.

👉 Learn more about DeFi tokens

Disclaimer: This content is informational only and not financial advice. Crypto assets are volatile; assess risks before trading.

© 2025 OKX. Reproduced with permission.

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