Wrapped Tokens - Crypto Academy / S4W6 - Homework post for pelon53.

QUESTION 1

Name at least 2 Blockchains that use Wrapped BTC, excluding Ethereum, and show screenshots. Explain.

From previous lessons we are know that every blockchain has its native coin or currency. These currencies only work on that blockchain hence the Bitcoin cant be used in the tron network and this a drawback for the crypto world.
In order for this issue to be solved tokens were created and called wrapped tokens. These wrapped tokens are designed in order for them to be used in a different blockchain. So most blockchain has wrapped tokens of other bockchain’s tokens which allows for that token to be used within the blockchain. Below are some blockchains that use the Wrapped BTC

• WRAPPED BTC ON BINANCE SMART CHAIN (BTCB)
  The wrapped BTC on the binance smart chain is known as BTCB. It has the same price as the BTC itself. The purpose of the BTCB is allow the free use of BTC on the Binance Smart chain. The two tokens can be swap for each other using the Binance Bridge feature. BTC holders are required to send their BTC to the Binance cold wallet and then the same value of BTCB will be allocated to the holder.
  The screenshot below shows the listing of the wrapped BTC (BTCB) on the binance blockchain explorer. Link

• WRAPPED BTC ON TRON NETWORK
  On the tron network the wrapped BTC is denoted as wBTC and is TRC-20 standard token. The tron blockchain came into an agreement with BitGo which will serve as a third party responsible for the swapping of BTC for wBTC. The purpose of it is to allow Bitcoin to be used freely on the tron network. It has the same value as the original BTC. If you want to swap your BTC for wBTC you will need to send the BTC to BitGo then that token is burnt and the equivalent wBTC is sent to your wallet.

From the tron explorer we found the wBTC to be list as shown. link

QUESTION 2

What is the difference between the wETH of the Ethereum platform and the wETH of the TRON platform? Explain.

They are both wrapped tokens but they also exhibit certain difference because they are used on different blockchains.
wETH on the Ethereum platform does not go through what is termed burning in unwrapping it. This is because both ETH and wETH all work on the same blockchain and as a result no third party is required in the swapping for the two tokens meanwhile the wETH on the TRON network undergoes burning during unwrapping. This is also because there is a third party on the TRON network that is responsible for the swapping for the wrapped ETH. The third party in charge is BitGo. When a user wants a wrapped ETH he will send it to BitGo where it will be minted and sent to him. In the same fashion in unwrapping he will send it to BitGo where it will be burnt and he will receive his ETH.

QUESTION 3

Make an investment of at least $ 5 of a Wrapped token. Explain the process with screenshots. You can use the JustSwap platform.

i shall be purchasing the wrapped BTC on binance, which is the wrapped BTC token for binance smart chain.

• this is a screenshot of my account with btc

• search for WBTC and click on the WBTC/ BTC pair

• enter the amount you want to buy then click on buy.
  

QUESTION 4

Explain in detail the Wrapped token of the TRON Blockchain. Show screenshot.

TRON blockchain has a variety of wrapped tokens on its network. This was done to improve interoperability with other networks. i will be talking about the top 4 wrapped token. Exploring from tronsacn the wrapped tokens on the TRON blockchain are;

• wBTC
• wBTT
• wTRX
• wETH

wBTC
This is a TRC-20 standard token that is based on the TRON blockchain. With this token it has been made possible for Bitcoin to be used on the TRON network. BitGo is responsible for the minting and wrapping of this token. From the TronScan the wrapped BTC has the following statistics.

wBTT
This is also a TRC-20 standard token and it is a wrapped version of the BTT token which is already a native token on the TRON network but on the TRC-10 standard hence the reason for its wrapping.
The statistics are as follows.

wETH
The wETH is a TRC 20 standard token that allows for the use of ETH on the TRON network. And of course BitGo is the third party responsible for its wrapping and unwrapping. Its statistics are as follows.

wTRX
As we know the TRX is the native token of the TRON network. The wrapped version is a TRC 20 standard token which makes it compatible with other Tron based tokens.

QUESTION 5

What is to mint a Wrapped token? What is burning a Wrapped token? What is your function? Create an example explaining the process.

MINTING A WRAPPED TOKEN.
From the lesson I understand that the parent token is always swap for a token is then called the wrapped token. The process by which the swapped version of the parent is generated is called minting.
In simple language minting token is the process by which the third party responsible for the wrapping of tokens receive a parent token and generate a wrapped version of the token and placed in to the system and then sent to the user.

BURNING WRAPPED TOKEN
The wrapped tokens are their parent token are always pegged at the same price. For this to be maintained the wrapped token has to be burnt in order for the parent token to be retrieved. Burning is the process by which the third party responsible for the wrapped token will make the wrapped token irretrievable so that the parent can be sent to the wallet of the user.
in wrapping a token minting occurs whiles in unwrapping burning occurs.

EXAMPLE
Lets assume I want to get Wrapped BTC on the tron network, I will then send the original BTC to the wallet address of BitGo. After BitGo receives the token they will then mint or generate a wrapped token of the BTC sent to them and then send the wrapped BTC into my wallet. When I also want to unwrap my wBTC I will have to send it to the wallet of BitGo the wBTC is burnt by BitGo and then the equivalent BTC is sent to the wallet of the user.

CONCLUSION
With the variety of blockchains in the world, they all have a native token or coin which is mainly used on that blockchain network. It was is impossible for a different token to be used I a different blockchain. This had a toll on the development of blockchain technology and hence the need to make things better. Then the use of wrapped tokens emerged as a solution. Wrapped tokens makes interoperability and also helps speeds up transactions in the various blockchains. Thanks to professor @pelon53 for such a great lecture.