Ethereum Classic Labs Rolls Out Wrapped ETC (wETC); Opening Up The Decentralized Finance (DeFi) Market

Ethereum Classic has announced the launch of wrapped ETC (wETC) to act as a gateway to the Ethereum blockchain, which today is a major playing field of Decentralized Finance (DeFi) applications. The announcement, which came on Wednesday, means that ETC users will have seamless access to the DeFi ecosystem without converting their tokens.

Recent months have seen the DeFi space grow exponentially as more stakeholders bet on its long term value. Unsurprisingly, the trend is catching with other crypto projects, including BTC, which already found its way to DeFi through wrapped Bitcoin (WBTC). In fact, DeFi Pulse metrics show that WBTC is the second most locked asset in the $13.5 billion DeFi TVL.

ETC Joins the Ethereum DeFi Bandwagon

The recently released wETC is an ERC-20 token, hence compatible with the Ethereum blockchain and DeFi applications, ranging from DEXes, lending, and derivatives. Basically, ETC users will now be able to stake their tokens on Ethereum and leverage the varied DeFi services within the ecosystem. ETC Labs CEO and Co-founder James Wo said that the milestone would at least attract 10% of ETC holders,

“We wanted to make sure ETC could go to a different ecosystem and use different applications on top of that ecosystem … I expect at least 10% of ETC holders will want to participate and use wETC.”

Notably, Ethereum Classic emerged from the Ethereum 2016 hard fork, triggered by the DAO hack. It now appears that the two communities are ready to work together despite Wo’s stance that ETC will maintain a Proof-of-Work consensus as Ethereum shifts to a Proof-of-Stake mechanism,

“Not everyone trusts PoS. Some projects believe in PoW … So I think some of the ecosystems will probably stick to ETC or other PoW versions of a blockchain that can make smart contracts.”

The Token Wrapping Concept

As the blockchain and crypto industry evolves, interoperability solutions have been at the forefront of most innovations. The concept of wrapping tokens and using them on a different blockchain has changed the industry, especially with the growth of an ecosystem like Ethereum. Basically, this involves issuing a blockchain asset such as Bitcoin on a different blockchain-based on a 1:1 representation.

The wrapped crypto asset can then perform various functions given its compatibility with a particular blockchain ecosystem. In the wETC case, users will transfer their wrapped tokens to the Ethereum blockchain via chainbridge, an interface for both ecosystems. A similar amount will be minted for use within the Ethereum ecosystem, after which they will be destroyed when users convert their tokens back to ETC.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Edwin Munyui
Edwin Munyui
Edwin is a FinTech enthusiast with a particular interest in blockchain technology and cryptocurrencies. He has worked as an author in the blockchain space since 2017 and enjoys creating content that both crypto veterans and newbies can understand. His simple writing style and financial market knowledge have made him a reputable fundamental and technical analyst with the ability to handle any topic around blockchain and crypto over the years.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,511FansLike
2,795FollowersFollow
4,273FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today