WETH vs ETH: How do they differ?
The WETH vs ETH debate is one of the hottest in the crypto circle. People often think that both tokens have the same value. This brings up the question, why use WETH rather than ETH?
Ether is the second largest cryptocurrency on the market, built for the Ethereum blockchain. However, the wrapped Ethereum (WETH) is only a representation of ETH and has the same value. However, it is an ERC-20 token that can be used on numerous blockchains.
Still confused? Here you can learn how they differ and what is the use of Ethereum’s wrapped version. Let’s dive in!
Understanding wrapped tokens
Before we move on to WETH vs ETH differences, it is crucial to understand what wrapped tokens are. These tokens are somewhat like stablecoins but backed by another digital currency instead of a fiat currency.
The central concept behind developing wrapped coins is that they can be used in different ecosystems. They solve one of the biggest problems for crypto developers and investors. They offer them interoperability.
If you have a native token of a blockchain that is only compatible with the particular blockchain, you would not be able to use it on others. That’s why smart contract coins are employed. As these work on a set standard like ERC20, many other blockchains can support them.
WETH vs ETH: The difference
Now that you know the concept behind wrapped tokens, it is easier to understand the difference between WETH and ETH.
Ether is one of the oldest crypto, developed before the token standards. The Ethereum Request for Comments 20 (ERC20) technical standard was introduced in 2015, and the digital coin itself does not follow this standard. That’s why other blockchains cannot support the token.
For this reason, wrapped Ethereum was launched. This allows you to use Ether’s representation on other blockchains. This version helps with the decentralised apps (DApps) on other networks. Also, it helps in NFT trading on different networks. So, even though you cannot use Ether directly, you can use a version on other networks.
WETH vs ETH: Which is better?
In essence, both these tokens are the same. Ethereum is the second-most valuable crypto with a comprehensive ecosystem. On the other hand, a wrap of Ether can be pretty handy if you have to trade fungible or non-fungible tokens on different ecosystems. That’s why the choice between them would depend on the usage purpose.
However, if your primary goal is an investment, then going for Ethereum would be ideal. After all, Ether is one of the altcoins to watch in 2022.
The wrap of a coin in a smart contract provides compatibility with other blockchains. Though there is no difference between the two coins, wrap versions provided interoperability. Therefore, Ether’s wrap is easy to use on other networks. You can easily convert your ETH to WETH from any cryptocurrency exchange without losing value.
Author: Wasay Ali
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