3 ms·
What’s the other 20b worth of eth for?
by captn3m0 5y ago
What’s the other 20b worth of eth for?
- cliftonk 5y agomost smart contracts that deal with tokens (swaps, borrowing, etc) use the ERC-20 standard. WETH is a simple smart contract where you deposit X eth and you receive x weth in return (where weth is a token that adheres to the ERC-20 standard). you can then use that weth to swap, borrow and lend in the same way you would with any other erc-20 token. most users never have to deal with the WETH contract because defi platforms will automatically do the wrapping/unwrapping for you. the vast majority of the WETH minted by this contract is used for a) providing liquidity on DEXs (where ~ 50% tokenA and 50% tokenB are deposited to collect trading fees) b) collateral in a lending platform (e.g. deposit WETH and borrow USDC) c) bridged to another chain (e.g. bridge WETH to Avalanche or Solana or whatever)
- dylkil 5y agopeople send eth to get weth back, weth is an erc20 wrapper for eth - wrapped eth