Can you explain the relationship between WETH and ETH in the context of cryptocurrency trading?

1 answers

• Dec 17, 2021 · 3 years ago
  As an expert in the cryptocurrency trading industry, I can explain the relationship between WETH and ETH. WETH, also known as Wrapped Ether, is a tokenized version of ETH that is used on the Ethereum blockchain. It is created by depositing ETH into a smart contract, which then mints an equivalent amount of WETH. The purpose of WETH is to enable easier trading on decentralized exchanges (DEXs) and provide liquidity for various DeFi applications. By wrapping ETH into WETH, users can trade it directly with other ERC-20 tokens without the need for specific ETH trading pairs. This increases the accessibility and flexibility of trading in the cryptocurrency market. Additionally, WETH can be used as collateral for borrowing funds in DeFi lending platforms. Overall, WETH and ETH have a symbiotic relationship, with WETH acting as a bridge between ETH and the Ethereum DeFi ecosystem.
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