Why is it impossible for WETH to have a thunderstorm? What is the difference between WETH and WBTC?

Original title: " Why is it impossible for WETH to have a thunderstorm? What is the difference between WETH and WBTC? "

Original source: PA News

Author of the original text: Jiang Haibo  

With the Genesis storm and the drastic decoupling of grayscale GBTC, the WBTC/BTC conversion ratio also slightly lower than 1. Under various unfavorable external conditions, FUD spread further to WETH. Under the jokes of various big Vs, some users were misled into thinking that WETH was risky.

Let’s start with the conclusion. It is almost impossible for WETH to be thundered. The pictures on the Internet about the exchange ratio of ETH and WETH in Uniswap are not 1 may come from P pictures Or self-issued counterfeit currency.

Why is it impossible for WETH to have a thunderstorm?

WETH stands for Wrapped Ether, which is the encapsulated ETH. The contract wrapping ETH into WETH is so simple that it's almost impossible to make mistakes. And the contract has existed for many years, saving billions of dollars of ETH. Users can exchange ETH for WETH or WETH for ETH at any time. Commonly used DEXs such as Uniswap also provide exchange entrances.

It can also be seen from the Ethereum blockchain browser Etherscan that as of the afternoon of November 28, the total number of WETH issued was 3,799,267, and the The exact same amount of ETH is also held in the address.

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Why do we need WETH?

Since ETH and WETH can be completely exchanged 1:1, why do we need WETH?

In the chain operations of Ethereum, careful friends may find that when using ERC-20 Token to interact with new contracts, authorization operations are required first , while using ETH is not required, the two follow different standards. ETH can be used as a fuel fee on Ethereum, but it was born earlier than the ERC-20 format and is not an ERC-20 standard Token . For some only accept ERC-20 Token For DeFi applications, ETH that is not in this format cannot be accepted, so WETH in ERC-20 format appeared.

For some contract developers, they can save development time by using WETH directly instead of developing additional contracts that support ETH. For example, if you want to use ETH to provide liquidity or borrow as collateral, you may need to convert ETH to ERC-20 standard WETH first.

The difference between WETH and WBTC

Although WETH (Wrapped Ether) and WBTC (Wrapped Bitcoin ) names look similar, but the principles of the two releases are completely different. PANews also wrote an article to introduce the relevant mechanism of WBTC in detail.

Because the original BTC exists on the Bitcoin network, to use it in the Ethereum smart contract, the original BTC can only be cross-chained to the Ethereum network.

Alameda Research, which has already been thundered, was once the largest merchant of WBTC. Some people worry that WBTC will be thundered, but this worry is unnecessary. The merchants and custodians of WBTC on Ethereum are controlled by a multi-signature contract, and the keys of the multi-signature contract are held by well-known institutions in the encryption field.

Kyber CEO Victor Tran proposed on GitHub on November 25 to migrate WBTC Big DAO to a new signature contract, and the number of voters changed from the original 11/18 As of 8/13, the FTX-related Blockfolio (FTX) address will be deleted. New members include B.Protocol, Badger, Balancer, BitGo, Chainlink, Compound, Gopax, Krystal, Kyber, Loopring, Multichain, Ren, Tom Bean.

So WBTC is essentially a cross-chain issued BTC anchor currency, which is controlled by multi-signature and relatively safe. WETH is the ERC-20 version of ETH. It only needs to go through a simple Wrapped Ether contract to complete the swap. It does not require complicated cross-chain processes, and no one can control the funds in WETH. It is almost impossible to have problems.

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