WETH vs ETH: How Do They Differ From Each Other?

WETH vs ETH: WETH and ETH are essentially equivalent. The former is simply the latter’s “wrapped” counterpart. By “wrapping” a token, a non-native asset can now be used on any blockchain, such as wrapped ETH on the BNB blockchain.

What is ETH?

Ethereum, also known as ETH, is a digital currency similar to Bitcoin that can be bought, sold, and traded on exchanges like any other cryptocurrency. However, Ethereum is capable of much more than just being a virtual currency. On the Ethereum network, it can be used to settle transaction fees, build Decentralized Applications (DApps), and create Smart Contracts.

What is WETH?

WETH is an abbreviation for Wrapped Ethereum, also known as Wrapped ETH. All tokens produced on Ethereum adhere to the ERC-20 protocol, with the exception of ETH, which does not. On the Ethereum network, a smart contract enables users to wrap ETH into WETH to increase ETH’s usability. Wrapping is the process that results in the production of WETH tokens.

WETH vs ETH: Differences

Even though ETH and WETH can occasionally be used interchangeably, there are some significant differences between the two. The native digital currency of the Ethereum network is called ETH. The gas, or transaction costs, needed to run smart contracts on the Ethereum blockchain are paid with ETH. Due to WETH’s ERC20 compliance, it can be held in any wallet or traded on any DEX that accepts the standard. Only wallets that support the Ethereum blockchain can store ETH, which is not ERC20 compliant.

WETH vs ETH: Which is better?

ETH and WETH are equal in value, so neither is superior to the other. However, choosing which one to use at a given time depends more on your needs than on which one might be superior. If users wanted to purchase something online, for instance, ETH would be a better option for them. However, they might need WETH if they wanted to buy some Bitcoin.

How does Wrap ETH work?

A wrapped ETH is generated by a smart contract that receives ETH. The ETH is locked into a secure address by a smart contract, but since WETH is backed by ETH reserves, users can exchange it whenever they want. As a result, the wrapped token (WETH) is burned when the smart contract sends the native token to their wallet. Always 1:1 is the swap ratio. Be aware that wrapping ETH will result in gas or transaction costs.

Another option is to use a decentralized exchange to trade WETH for another coin (DEX). A different token can also be directly exchanged for WETH using their MetaMask wallet. ETH can be wrapped and unwrapped entirely with the help of UniSwap, OpenSea, and MetaMask.

To wrap ETH with MetaMask, follow the steps below:

1. Make sure the user has a MetaMask account. Enter their wallet’s password.
2. They can see how much ETH they have in their wallet. If they don’t have enough money, they can purchase some ETH with a credit or debit card.
3. Connect your MetaMask wallet to a decentralized exchange, such as Uniswap.
4. Before clicking Swap, the user must be connected to the Ethereum mainnet.
5. A new prompt with token options will appear on your screen.
6. In the Swap to box, select WETH from the drop-down menu.
7. Enter the amount of ETH you want to wrap and then click Review Swap.
8. After that, users be redirected to a new prompt with the final transaction details.
9. Check the transaction information, gas fees, and conversion rate (1:1) for the translation. They will be asked to add more funds if they do not have enough to complete the transaction.
10. Now, click Swap to complete the transaction.

After the transaction is finished, WETH will be delivered to your wallet. By opening WETH, you can send native tokens back to your wallet.

WETH vs ETH: How to Unwrap WETH

After learning how to convert ETH into WETH, let’s examine how to unwrap WETH. Burning the wrapped token until it reaches its original form is known as unwrapping. WETH is therefore converted into ETH and deposited into your wallet when it is unwrapped.

Ether can be unwrapped in a variety of ways:

1. Manual interaction with smart contract
2. Exchange ETH for WETH using Uniswap or Binance
3. Use MetaMask on OpenSea.

How to Unwrap WETH on OpenSea using MetaMask

The steps listed below should be followed in order to unwrap wrapped tokens:

1. Log in to your account at OpenSea.
2. In the top right corner of the screen, click the wallet icon.
3. User’ll be prompted to log in with their wallet.
4. Proceed by selecting MetaMask.
5. Log in with your password.
6. User can view their fund details after signing in to their account.
7. If your funds are limited, consider adding WETH.
8. Choose the three dots that appear next to your WETH information.
9. Choose the last option (Unwrap).
10. On your screen, a new prompt with transaction details will appear.
11. Check the details of the WETH you want to convert to ETH.
12. Select Unwrap.

After the user has completed their request, click confirm to receive the original asset (ETH) in their wallet. Even though the wrapping and unwrapping procedures for MetaMask were covered above. However, they can use other wallets if it’s more convenient for them.

Conclusion

WETH vs ETH: While WETH and ETH may initially appear to be similar, their structure, usability, and flexibility are very different. Anyone looking to use either cryptocurrency must be aware of these differences. The differences outlined in this article must be understood before using WETH or ETH. Keep in mind that WETH and ETH have the same value. The only distinction is in how they are applied. In essence, WETH is an extension of ETH that is more adaptable and user-friendly and can be applied to a wider range of uses.

Also Read: Etherscan: Meaning, How Does It Work, And How Is It Used?