Wrapped Tokens – Breaking the Barriers between Blockchains

Blockchain technology is rapidly growing in popularity. Many decentralized networks are coming up. Developers are thinking outside the box to exploit the technology’s potential. Additionally, developers continue to recognize that the blockchain requirements are too vast for one application to meet. The situation has given rise to the need for interoperability (connecting different chains).

Cross-chain technology has become a major subject of debate as to the ultimate solution to improving the interoperability of blockchain. Cross-chain is a technology that seeks to enable value and information transmission between different blockchain networks. Most blockchain networks operate on isolated ecosystems since they address unique sets of needs. Consequently, it has been difficult for users of decentralized networks to enjoy the full benefits of ledger technology. Enabling interoperability makes it possible for different blockchain networks to communicate and share information.

Wrapped Token – Circumventing the Limitation

A wrapped token is simply a tokenized version of another digital currency. The technology enables the use of non-native tokens on a blockchain. Wrapped tokens live on a blockchain it was not issued on initially.

A wrapped token is pegged to the value of another cryptocurrency. The technology follows the format stablecoins, only that the latter is pegged on fiat currency. It is called a “wrapped” token because the original crypto asset is put in a “wrapper” that will make it compatible with another blockchain network.  Users can easily trade wrapped coins just like any other asset. Traders can redeem these tokens at any time.

BSC Wrapped Etherum Token

Ethereum Wrapped tokens on Binance Smart Chain refer to native tokens of the Ethereum network that exists on Binance Smart Chain. This technology enables the usage of non-native Ethereum tokens in the BSC network.

Ethereum tokens are not compatible with Binance Smart Chain. Therefore, users cannot exchange ETH for other BEP-20 tokens in a decentralized manner. This scenario creates a challenge for the users who are required to convert between Ethereum tokens to BSC-compatible tokens. BSC Wrapped Ethereum was created to solve this problem.

To acquire BSC wrapped Ethereum token, you need to send ether to a smart contract where is put on hold. You then receive the pegged token at a ratio of 1:1. You only need to send back the wrapped token to the same smart contract to get back your ETH. The wrapped token will be redeemed back (“unwrapped”) at the same ratio (1:1). The process of wrapping and unwrapping Ethereum costs gas. However, this gas is lower when using BSC compared to when using other blockchains.

Advantages of Wrapped Tokens

Wrapping Ethereum tokens allows users to use Ethereum tokens on the BSC ecosystem directly and seamlessly. You do not need a third party to exchange between BEP20 tokens and Ether.

Wrapping native tokens of Ethereum blockchains also create the utility of the coins as well as liquidity on BSC. Ethereum is one of the largest cryptocurrency ecosystems. Many developers in that ecosystem create many solution tokens. These tokens are brought to BSC through wrapping. As a result, the token will increase in utility. Additionally, Binance boasts a high transaction speed and low gas. Therefore, traders can enjoy faster transactions and lower fees trading Ethereum tokens on BSC.

Getting the Tokens

You can buy the BSC wrapped Ethereum tokens on the Wsum.io exchange. The process of purchasing these tokens is fast and simple. After creating an account with the exchange and depositing some funds, you can complete the purchase process. You can use these tokens in other DeFi protocols and even on NFT platforms.

Final Thoughts

BSC wrapped Ehereum tokens break the barrier between BSC and Ethereum blockchain. It creates more interoperability, improves the tokens’ utility, as well as improved the BSC’s liquidity. You can try out these tokens and enjoy the immense benefits that it brings.

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