Wrap Protocol Brings Ethereum Tokens and NFTs to Tezos

tezos reddit

In short

  • Tech startup Bender Labs has launched Wrap Protocol—a decentralized bridge between Ethereum and Tezos.
  • The protocol permits customers to “wrap” their ERC-20 and ERC-721 tokens and transfer them exterior of the native blockchain.

Tech startup Bender Labs has launched Wrap Protocol (WRAP), a decentralized bridge that enables transferring ERC-20 and ERC-721 tokens between the Ethereum and Tezos blockchains, based on an announcement shared with Decrypt right this moment.

Bridge protocols permit the switch of tokens exterior of their native blockchains by “wrapping” them. The tokens are locked on the blockchain, with the corresponding quantity of wrapped tokens showing on one other community.

Notably, wrapped tokens are designed to retain all traits of the “originals,” together with value. For instance, one Wrapped Ethereum (WETH) can at all times be redeemed for one common Ethereum (ETH) locked on the native blockchain.

Bender Labs’ Wrap protocol permits customers to switch the 2 hottest Ethereum token requirements into FA2 tokens on the Tezos blockchain. ERC-20 is the technical normal on which the vast majority of widespread Ethereum tokens are primarily based, together with Uniswap (UNI), Chainlink (LINK), Maker (MKR), DAI, and lots of others.

ERC-721 is the usual for the wildly widespread non-fungible tokens (NFTs), cryptographically distinctive tokens that can be utilized to characterize digital content material akin to artwork and music. In contrast to most tokens, NFTs are non-interchangeable, which means that they can be utilized to create shortage for digital content material.

To switch Ethereum-native tokens to the Tezos blockchain, Bender Labs’ WRAP protocol creates “wTokens”—representations of ERC-20 and ERC-721 tokens. Whereas the worth of wTokens is pegged to the unique property, they are often freely used inside the Tezos ecosystem.

“On the middle of WRAP is the $WRAP token, which is each an ERC-20 and an FA2 token,” the builders defined. 

Greener DeFi pastures

Per the announcement, one of many important use circumstances for transferring Ethereum tokens to different blockchains is the quickly rising and widespread decentralized finance (DeFi) sector. The lion’s share of DeFi enterprise is performed on Ethereum—however points akin to skyrocketing transaction charges and considerations over the environmental affect of its proof-of-work blockchain are prompting customers to search for options.

In accordance with crypto metrics platform BitInfoCharts, common transaction charges on Ethereum peaked at over $30 final week—whatever the quantity being transferred. Because of this whereas “whales” can simply switch hundreds and even tens of millions of {dollars} price of crypto for a fraction of the associated fee, it’s turning into more and more impractical for customers to make small transactions.

Moreover, not like Ethereum’s computationally and energy-intensive proof of labor consensus algorithm, Tezos makes use of proof of stake, which doesn’t require large quantities of electrical energy or high-end mining rigs to validate transactions.

“Wrap Protocol is positioned to be a core component of the paradigm shift of decentralized finance and the widespread adoption of an open monetary system working on public blockchains,” Bender Labs concluded.

Final December, Tezos improvement group StableTech additionally launched wrapped Ethereum tokens, permitting the worth of ETH to be transferred to the Tezos blockchain.

Source link