Course Content
​​What Is Wrapped Ether (WETH) and How to Wrap It?
Wrapped Ether (WETH) is a token pegged to Ether (ETH). WETH is used in several platforms and DApps that support ERC-20 tokens. While ETH is used to pay for network transaction fees, it doesn't have the same functionality as ERC-20 tokens. You can easily convert ETH into WETH through a process known as wrapping. You can also convert WETH back into ETH at any time. Both wrapping and unwrapping follow a 1:1 ratio, meaning there are no extra costs apart from transaction fees. You can wrap your ETH manually by interacting with the WETH smart contract, which will store your ETH and give you back the exact same amount of WETH. Ethereum's DeFi ecosystem is large, and using WETH provides more opportunities for staking and investing. There are many versions of WETH, but some are more popular than others. You can even find wrapped ETH on other blockchains to use in their ecosystems. Popular uses for WETH include NFTs trading, providing liquidity to liquidity pools, and crypto lending.
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​​What Is Wrapped Ether (WETH) and How to Wrap It?
About Lesson
Ethereum has many DeFi DApps to explore that accept ERC-20 tokens. One option is to add WETH to a liquidity pool available on a Decentralized Exchange (DEX) like Uniswap. After providing liquidity, you’ll begin to earn fees from users who swap their tokens using the pool. However, impermanent loss is always a possible risk that can lead to a decrease in the number of your deposited tokens. Using a pool with larger amounts of liquidity will reduce this risk.
You could also begin lending out your WETH on a platform like Aave. Other users can borrow your tokens but must first provide collateral covering their loan. In return, you’ll receive interest until you decide to remove your deposit.
Exercise Files
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