Overview
Ethereum (ETH) and Wrapped Ethereum (WETH) are fundamental components of the Ethereum ecosystem, each serving distinct roles. While ETH is the native cryptocurrency powering the network, WETH acts as its ERC-20 compliant counterpart, enabling broader utility in decentralized applications (dApps) and smart contracts.
Ethereum (ETH): The Native Cryptocurrency
- Nature: ETH is the intrinsic asset of the Ethereum blockchain, used for transactions, gas fees, and staking.
Function:
- Facilitates peer-to-peer transactions.
- Pays for computational resources (gas) on the network.
Limitations:
- Not natively compatible with dApps requiring ERC-20 tokens.
- Requires "wrapping" to interact with certain DeFi protocols.
👉 Discover how ETH powers the future of decentralized finance
Wrapped Ethereum (WETH): The ERC-20 Bridge
- Nature: A 1:1 representation of ETH as an ERC-20 token.
Function:
- Ensures ETH compatibility with ERC-20-based dApps (e.g., Uniswap, Aave).
- Simplifies token swaps and liquidity provisioning in DeFi.
Creation:
- Users "wrap" ETH into WETH via smart contracts (irreversible without unwrapping).
Example: Converting ETH to WETH to trade on a DEX that only supports ERC-20 tokens.
Why WETH Matters
- Interoperability: Bridges ETH with ERC-20 ecosystems, expanding usability.
- Standardization: Enables uniform token interactions across dApps.
- DeFi Integration: Essential for lending, yield farming, and liquidity pools.
Key Differences Summary
| Feature | ETH | WETH |
|------------------|-----------------------------|------------------------------|
| Token Standard | Native | ERC-20 |
| Usage | Gas fees, transactions | dApps, DeFi protocols |
| Compatibility | Limited to native functions | ERC-20 compliant |
FAQs
1. Is WETH safer than ETH?
Both are equally secure since WETH is backed 1:1 by ETH through audited smart contracts.
2. How do I convert ETH to WETH?
Use platforms like MetaMask or decentralized exchanges (DEXs) to wrap ETH instantly.
👉 Learn the step-by-step process to wrap ETH
3. Can WETH be unwrapped?
Yes, WETH can be converted back to ETH at any time.
4. Does WETH earn interest?
Only when used in interest-bearing DeFi platforms like Compound or Yearn Finance.
5. Why don’t dApps accept ETH directly?
ERC-20 standards streamline token management for developers, reducing complexity.
Conclusion
ETH and WETH complement each other: ETH fuels the blockchain, while WETH unlocks its full potential in DeFi and dApps. Understanding their differences empowers users to navigate the Ethereum ecosystem effectively.
Last updated: May 2025
### SEO Notes:
- **Keywords**: Ethereum, Wrapped Ethereum, ETH vs WETH, ERC-20 tokens, DeFi, smart contracts.