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How does WETH differ from ETH in terms of functionality and use cases?

avatarAhmed ShabaanNov 29, 2021 · 3 years ago3 answers

Can you explain the differences between WETH and ETH in terms of their functionality and use cases? I'm trying to understand how these two cryptocurrencies are different and when it would be more appropriate to use one over the other.

How does WETH differ from ETH in terms of functionality and use cases?
WETH
ETH
Cryptocurrency

3 answers

  • avatarNov 29, 2021 · 3 years ago
    WETH, or Wrapped Ether, is an ERC-20 token that represents Ether on the Ethereum blockchain. It is essentially a tokenized version of ETH, which means that 1 WETH is always equal to 1 ETH. The main purpose of WETH is to enable ETH to be used in decentralized applications (dApps) and smart contracts that only accept ERC-20 tokens. By wrapping ETH into WETH, users can easily interact with these dApps and smart contracts without having to convert their ETH into ERC-20 tokens. This makes WETH more versatile and compatible with a wider range of applications compared to ETH.
  • avatarNov 29, 2021 · 3 years ago
    In terms of functionality, ETH is the native cryptocurrency of the Ethereum blockchain and is used as a medium of exchange for transactions and as a store of value. It is the base currency for all transactions and operations on the Ethereum network. On the other hand, WETH is a tokenized version of ETH and is primarily used to enable ETH to be used in dApps and smart contracts that only accept ERC-20 tokens. While ETH can be used for various purposes within the Ethereum ecosystem, WETH has a more specific use case of facilitating interoperability between ETH and ERC-20 tokens.
  • avatarNov 29, 2021 · 3 years ago
    As an expert in the cryptocurrency industry, I can tell you that WETH and ETH have different use cases and functionalities. WETH is particularly useful when you want to interact with decentralized applications and smart contracts on the Ethereum blockchain that only accept ERC-20 tokens. By converting your ETH into WETH, you can seamlessly participate in various DeFi protocols, trade on decentralized exchanges, and lend or borrow assets on lending platforms. On the other hand, if you're simply looking to hold ETH as a long-term investment or use it for regular transactions, then there's no need to convert it into WETH. ETH can be used directly for these purposes without the need for tokenization.

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