What Is WETH and How to Wrap It?

WETH (Wrapped Ether) might initially appear redundant given ETH’s presence on the Ethereum blockchain. However, it’s crucial to understand that Ethereum tokens can have varied functionalities. Ethereum’s flexible platform allows for diverse cryptocurrency standards, like ERC-721 for unique Non-Fungible Tokens (NFTs), differing significantly from Ether and ERC-20 tokens. Let’s find out what is WETH, why it’s used and how to get it.

What is Wrapped Ether (WETH)?

WETH is the ERC-20 compliant, wrapped version of Ether, maintaining a 1:1 value ratio with ETH, ensuring safe trading and investment. Much like stablecoins, which could be considered “wrapped USD,” wETH and other wrapped tokens mirror the value of their underlying assets, promoting seamless interchangeability and solving blockchain interoperability issues. This tokenization process allows assets like Bitcoin or Avalanche to operate on the Ethereum network. 

Unwrapping wETH is straightforward, requiring users to send their tokens to a smart contract on the Ethereum network, which then returns an equivalent amount of ETH. Additionally, other blockchains such as Fantom and Avalanche have similar wrapped versions of their native tokens, facilitating a more interconnected and efficient cryptocurrency ecosystem.

Why do we need to Wrap ETH?

While ETH is essential for transaction fees on Ethereum, it’s not universally applicable across decentralised applications (DApps), particularly in the decentralised finance (DeFi) sector. The DeFi landscape predominantly utilises ERC-20 tokens for investments and staking. So, what is Wrapped Ether? That’s exactly why converting ETH into an ERC-20 is necessary. It’s a compatible form that ensures seamless integration into liquidity pools and its use as collateral, fostering broader compatibility and minimising the need for new smart contracts.

How to Wrap Ether (ETH)?

By following these steps, users can seamlessly convert ETH to WETH, ensuring compatibility across various decentralized applications and services. 

Step 1: Choose a Decentralized Exchange (DEX)

• Select a reputable DEX that supports ETH wrapping, such as Uniswap (UNI).

Step 2: Connect Your Crypto Wallet

• Connect a compatible crypto wallet (e.g., MetaMask) to the chosen DEX.
• Click “Connect Wallet” in the top right corner of the exchange’s interface.

Step 3: Ensure You Have Sufficient ETH for Gas Fees

• Verify that your wallet holds enough ETH to cover the transaction’s gas fees. These fees are payable in ETH, not WETH.

Step 4: Initiate the Wrap

• On the exchange, select ETH as the asset you wish to swap.
• Choose WETH as the asset you want to receive.

Step 5: Confirm the Transaction

• Review and confirm the transaction details in your crypto wallet.

Step 6: Receive WETH in Your Wallet

• Upon successful completion, WETH will be credited to your wallet, replacing the equivalent amount of ETH.
• This transaction and the associated locked ETH will be visible on the blockchain in a smart contract.

Using the WETH smart contract on OpenSea

In this section, we’ll talk about what is Weth crypto by walking through the process of converting ETH to wETH on OpenSea utilizing the wETH smart contract.

Begin by navigating to the OpenSea platform, and locate the “Wallet” option at the top-right corner of the page. Click on it. Subsequently, find Ethereum in your assets list, click on the three dots adjacent to it, and select the “Wrap” option.

You will then be prompted to input the amount of ETH you wish to convert into wETH. After entering the desired amount, proceed to click on “Wrap ETH.” This action initiates a request to the wETH smart contract to facilitate the conversion from ETH to wETH.

A notification will pop up, requiring your approval to sign and confirm the transaction. Ensure to review the transaction details before proceeding.

Upon successful transaction confirmation, a message will appear on OpenSea, indicating that the wrapping process is complete. You can then view the converted wETH in the wallet section of your OpenSea account. Note that wETH is easily identifiable by its pink Ethereum diamond logo, distinguishing it from regular ETH. You can read what is Weth on OpenSea as well as on Uniswap.

Generating WETH via Uniswap

To generate WETH using Uniswap, start by connecting your digital wallet and ensuring it is set to the Ethereum network. Navigate to “Select Token” at the bottom of the interface and choose WETH from the list of available options.

Enter the amount of ETH you wish to convert, and then click “Wrap.” Following this, you will need to authorize and confirm the transaction in your crypto wallet. Be prepared to cover the gas fees with ETH at this point.

After confirming the transaction on your end and ensuring all details are correct, the only step remaining is to wait for the blockchain to confirm the transaction as well. Once confirmed, your ETH will be successfully converted to WETH via Uniswap.

Generating WETH with MetaMask

Start by launching your MetaMask wallet and find what is the Weth on its official website. Verify that “Ethereum Mainnet” is the active network. Navigate to and click on the “Swap” option. From there, choose wETH in the “Swap to” field. Enter the quantity of ETH you wish to convert and proceed to click “Review Swap.”

A prompt will appear, providing a conversion rate quote, which should display a 1:1 ratio given that the transaction involves converting ETH to wETH. To complete the process, select “Swap.” Ensure to review all details carefully before confirming to successfully generate WETH with MetaMask.

How to unwrap Ether (ETH)?

Ether unwrapping can be performed manually through direct interaction with a smart contract. As an example, just like the wrapping process, ETH can be unwrapped using the wETH smart contract on OpenSea, with the primary distinction being the selection of “Unwrap wETH” instead of “Wrap ETH.”

Similarly, converting wETH back to ETH is feasible using platforms like Uniswap or MetaMask. The unwrapping procedure on these platforms mirrors the previously described wrapping steps, with the crucial variation of switching the values from wETH back to ETH. Ensure to follow the chosen platform’s instructions carefully to complete the unwrapping process successfully. 

How does wrapped ETH stay at the same price as ETH?

The stability of WETH’s parity with ETH hinges on its ability to be converted at a 1:1 ratio. Should WETH’s value drop below ETH, individuals would be incentivized to acquire WETH and transform it into ETH, capitalizing on the price discrepancy for financial gain. This action would elevate the demand and subsequently the value of WETH. 

Conversely, if WETH held a higher value than ETH, people would be inclined to buy ETH and convert it into WETH for selling, amplifying the supply of WETH and diminishing its value. The fundamental economic forces of supply and demand play a crucial role in upholding the stability of WETH’s equivalence to ETH.

FAQ

Why was WETH created?

The question is highly related to what is Weth token and what is it for? ETH is not ERC-20 compatible because it preceded the development of the ERC-20 standard. To facilitate its use in DeFi DApps, ETH is wrapped in an ERC-20 wrapper through a smart contract.

Is WETH the only wrapped asset on Ethereum?

Weth what is well-know as Wrapped Ether is not the sole wrapped asset available on the Ethereum network. The Ethereum blockchain hosts a variety of wrapped tokens, encapsulating assets from diverse blockchains and even real-world commodities. 

How can I get WETH?

If you’re looking for Weth what is, you’ll also find how to get it. You can obtain WETH by sending ETH to a smart contract that wraps the ETH and returns WETH to your wallet, or through decentralized exchanges like Uniswap or MetaMask.

Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.