On July 30, 2015, 6 years after Bitcoin, Ethereum was launched. This blockchain’s currency, Ether, has increased in price drastically from $0.311 to $1297.43 at the time of writing this. If not for Bitcoin, this would be one of the top cryptocurrencies today in terms of market capitalization.
History
While we now better understand where the native token Ether came from, what about Wrapped Ethereum? And how did Ether end up becoming so widely used anyways?
Wrapped Ethereum (WETH)
Wrapped Ethereum was created by Will Warren, who co-founded Ox Labs. Before this, he worked as a researcher at the Los Alamos National Laboratory, a United States Department of Energy laboratory.
Ethereum (ETH)
ETH is the original token from the Ethereum blockchain. It’s seen fluctuations in its price over the years, hitting an all-time high of $4,891.70. Many experts anticipate it will return to near this amount in the coming months.
What Are They, And Why Were They Created?
Wrapped Ethereum, of course, succeeded Ethereum, but what brought about the original blockchain? And who made it in the first place? Let’s explore.
Wrapped Ethereum (WETH)
ETH is incompatible with many Defi DApps built on the Ethereum blockchain. They were generally developed using a technical standard known as ERC-20. These are the new standard for smart contracts on the Ethereum blockchain.
Ethereum (ETH)
Ethereum was created by programmer Vitalik Buterin, along with computer scientist Gavin Wood and entrepreneurs Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin. It was made to use blockchain technology on many different applications.
This is unlike Bitcoin, which was merely made as a payment method. The Ethereum blockchain had another aim altogether, although the two appear similar.
Price History
While Wrapped Ethereum’s price is set in stone, Ethereum’s has been much less so. Let’s look at how it’s grown over the years and what we can expect in the future.
Wrapped Ethereum (WETH)
These wrapped tokens share their price with Ether and are pegged at a ratio of 1:1.
Ethereum (ETH)
Ether prices started at less than a dollar to over a thousand dollars today, but many experts suspect that prices may increase well into 2030. Because it’s anticipated that Ethereum will become more sustainable and efficient, experts agree that the value of the tokens will rise.
This is due to the switch to proof-of-stake (essentially a less intensive way of authenticating transactions), improving the network’s scalability. Things are looking up for ETH.
Market Cap
Are you wondering how much of the market Ether dominates and has held in the past? Read on to learn more.
Wrapped Ethereum (WETH)
As merely the ERC-20 compatible version of Ether, Wrapped Ethereum shares the same market cap as Ethereum. To determine the market cap of these wrapped tokens, look at Ether’s current status.
Ethereum (ETH)
As of the time of writing this, Ether’s market cap is at $156 610 000. That’s quite a high value! But what was its all-time high? On November 9, 2021, Ether had a market capitalization of $571,67, 000. However, it still remained second to Bitcoin, which on November 9, 2021, had a market capitalization of $1,280,000,000, over double Ether’s.
The sky’s nearly the limit for Ethereum, which, unfortunately, is capped at a yearly amount. Each year, 18 million ETH can be mined. However, it can almost be said that there is an unlimited supply, despite this restriction.
Bitcoin, on the other hand, will eventually have no more coins to mine, albeit in over a century. Experts put Bitcoin’s end at around the year 2140.
Daily Transactions
What are ETH and WETH used for on a day-to-day basis anyways? In the following sections, this is what we’ll be exploring.
Wrapped Ethereum (WETH)
You can use wrapped ETH to pay for services and transaction fees on DApps. It’s also commonly used to trade for different tokens on decentralized exchanges that support only ERC20 tokens.
Additionally, the coin is often used as collateral on various lending platforms. This lets users get loans without actually selling their Ether, especially if they anticipate that prices will climb in the future.
Ethereum (ETH)
This token is commonly sold, traded, and bought on exchanges. Although, it’s also used to create smart contracts on the Ethereum network. By definition, these contracts are just programs that operate on the Ethereum network.
Similarities
Both ETH and WETH have the same value, and that’s because they’re the same coin with the same features. However, Wrapped Ethereum is ERC-20 compliant, allowing it to interact on the Ethereum network without needing a third-party application.
You can easily convert ether tokens into wrapped tokens for ease of use in a decentralized app.
Differences
Ether may share the same value with WETH, but the two differ. Primarily in that, Ether’s use is quite limited. The majority of tokens today follow ERC-20 standards, of which WETH is compliant.
Wrapped Ethereum allows buyers to use the coin across various ecosystems and DApps.
Risks
ETH has held a dominant position in the crypto space for a long time. However, competitors challenge this.
Wrapped Ethereum (WETH)
Wrapped ETH poses no more risk than Ether itself, as it’s pegged at its value. You can also unwrap WETH tokens to return them to being just ETH. All users must do is send their wrapped Ether to a smart contract on the Ethereum network, which will then return the equivalent amount of ETH.
Ethereum (ETH)
There’s a genuine concern that it may start to dwindle because ETH is not as decentralized as crypto giant Bitcoin. There are also a growing number of rival blockchains that threaten the survivability of ETH.
Further, it’s found that because the top 100 addresses of ETH hold 39% of the supply, this will likely increase its volatility. In fact, since 2018, the token has been 30% more volatile than Bitcoin.
Where to Buy
As the crypto coin with the second highest market value, and some optimistic projections, you may be wondering where you can buy yourself some. Well, that’s what we’re going to look at next.
Wrapped Ethereum (WETH)
You can wrap your ETH to get Wrapped Ether. You’ll have to first install Coinbase or MetaMask Wallet to do this. After setting up your account on one of these platforms, connect the wallet to the decentralized exchange.
Once a connection has been established, you’ll be able to transfer native tokens for Wrapped Ether quickly. Wrapping ETH is a very efficient process.
Ethereum (ETH)
You can buy Ether through more mainstream broker platforms such as Paypal and Robinhood. You may also try several other trading platforms like Binance, Coinbase, Kraken, and Bitstamp. However, when purchasing any cryptocurrency, always remember that there’s a lot of fraud in the crypto space.
Consider how secure the website you’re purchasing from is, whether they’re licensed, and where they are based. Ether is extremely expensive, and spending your money on fake cryptocurrency will do a lot of damage to your financial situation.
Exchanging ETH for WETH
As we’ve alluded to, converting ETH to its wrapped version requires the installation of either Coinbase or MetaMask Wallet installation. After following the process, you’d have officially “wrapped” your coins, making them compatible with modern ERC-20 technical standards.
You can also unwrap WETH by following a similar process in one of the above platforms.
Future Plans
What does the future hold for wrapped ETH and ETH as a whole? Let’s take a look.
Wrapped Ethereum (WETH)
Wrapped Ether will remain standard practice and follow along with Ether’s value. To understand WETH’s future, you need only read about ETH.
Ethereum (ETH)
Ethereum’s future is looking bright – extraordinary so. Due to lower gas fees and scalability, predictions for 2030 are looking at a valuation of $14,000 or more per coin. Even by 2025, we’re anticipating that the coin could be worth upwards of $10,000.
In short, investors are advised to hold onto their coins and buy new ones if they have the funds. But, of course, at the end of the day, it’s hard to speak with absolute certainty, and these are merely predictions.
For now, by upgrading its network to be more sustainable, scalable, and secure, the Ethereum team is making strides in maintaining the relevancy of its coin and keeping pace with competitors.
The blockchain has already made strides through its merger, combining its distinct Ethereum networks into one more efficient and sustainable system. The future of cryptocurrency as a whole is exciting as it continues to grow and expand, despite naysayers and skeptics.
Sources:
https://learn.bybit.com/altcoins/what-is-weth-vs-eth/
https://www.exodus.com/news/are-eth-and-weth-different/
https://phemex.com/academy/what-is-weth-and-weth-vs-eth
https://www.forbes.com/advisor/investing/cryptocurrency/wrapped-ethereum-weth/
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