WETH in Polygon PoS?
WETH, or Wrapped Ethereum, is a tokenized version of ether that aligns with the ERC-20 token standard, allowing it to function within the Polygon PoS and other networks that primarily use ERC-20 tokens. At Bitso, users can now deposit and withdraw WETH on the Polygon PoS network, giving them the advantage of faster and more affordable transactions than traditional networks.
Why WETH and not ETH at Bitso?
Native Ether (ETH) doesn't conform to the ERC-20 token standard, a prevalent specification for tokens on networks like Polygon PoS. WETH, or Wrapped ether, was introduced as a solution to this. By wrapping ether, it gets converted into an ERC-20-compliant token, allowing it to be seamlessly integrated into these networks.
Bitso utilizes WETH for this precise reason – to offer the benefits of ether on the Polygon PoS network while adhering to the technical requirements and ensuring smooth, efficient user transactions.
What makes it unique
- WETH bridges ether to networks like Polygon, allowing it to be used where native ether can't be.
- It is crucial in many DeFi platforms, from trading to lending/borrowing mechanisms.
- Depositing WETH on Polygon at Bitso allows users to withdraw it as ETH on other supported networks, with Bitso simplifying the bridging process.
Purpose
WETH's primary role is to extend Ethereum's utility to ERC-20 focused networks like Polygon. It is prevalent in the DeFi space, being used on platforms like OpenSea for NFT trading, liquidity pools, and lending/borrowing protocols on DeFi. By facilitating WETH transactions on the Polygon network, Bitso aims to meet its users' demands for faster, cheaper Ethereum-related transactions and to harness the increasing significance of DeFi.
How WETH is Used in DeFi
WETH is not just a bridge between Ethereum and Polygon; it's a cornerstone in decentralized finance (DeFi). Platforms such as:
- OpenSea: Here, WETH is instrumental in buying and selling NFTs, providing users with transactional flexibility.
- Uniswap: As one of the prominent decentralized exchanges, Uniswap features WETH pairs in its liquidity pools, enabling users to provide liquidity and earn returns.
- Aave: A renowned lending/borrowing protocol that accepts WETH as collateral, facilitating borrowing against it or lending it out for interest.