Wrapped Tokens - Crypto Academy / S4W6 - Homework post for pelon53
Good day all the active steemit, hope you're enjoying yourself by exercising your brains
1-Name at least 2 Blockchains that use Wrapped BTC, excluding Ethereum, and show screenshots. Explain.
Binance Smart Chain
Binance Smart Chain, the BSC was introduced to join the wrapped token with its aim to different blockchains together for the purpose of transaction. There is a special feature that the BSC has, which is the Binance Bridge, the Binance Bridge has to link two or more different blockchain together. It can said that with the help of the bridge wrapped token can be created, the token that is created is called BEP-20 token. There are so many examples of wrapped token, and they include the follow wETH, wBTC, WDOT etc.
WE have already known that the Binancce brigde turns the native token into a wrapped token. The wrapped tokens are usually called the BEP-2 or the BEP-20.
The wrapped token have two special features and they Peg in and peg out.
The Peg in is simply means when the Native token is converted to the Wrapped token, while Peg out, is the opposite of Peg in, it is converting from the wrapped token back to the native now.
How the Peg-in is being done
- Make sure you have opened your wallet
- Select the crypto that is to converted. In this case we will be using Bitcoin
- Deposition of 10wBTC will also be 10wBTC
See below for more information from the chart.
TRON BLOCKCHAIN
The CEO of Tron Foundation, Justin Sun founded this platform in 2017. The purpose of establishing the platform was to create a fundamental basis of DeFi ecosystem, to solve the bitcoins and other blockchain issue with scalability.
The Tron blockchain uses TRC-20 tokens as it main token. In the Coinmarketcap , the Tron coin is ranked 28 with the price of $0.09978 and a market cap of $7,156,670,997, that means the coin is doing well.
Partnership between TRON foundation and the BitGo was established on September 2020, The partnership was done so that Bitcoin and Ethereum can also do transactions on the TRON plattform. After the alliance, transactions can noe be done on the Tron Blockchain using Bitcoin and Ethereum. The made the Bitcoin to be a Wrapped Bitcoin and it was called Bitcoin TRC20 (BTCT) with current value of $62,051.63 and it is ranked number 2726 and it also has a market ccapitalization
Of $1,305,577,820,841
What are the differences between the wETH of the Ethereum platform and the wETH of the TRON platform?
One of the main difference between the wETH of Tron and that wETH of Ethereum is that the wETH of TRON was developed by BitGo. Ethereum has no hands in the creation of wETH of TRON. BitGo controls its entirety. AFter reaching an agreement, They started minting wrapped token making them the second platform to mint Wrapped token which has access to both the bitcoin and ethereum
wETH token of ETHEREUM is made with the standard of ERC20. and this made the ERC 20 to be unable to do transactions on different decentralized platforms
Also the wETH token is not Decentralized making it not to act as a stable coin.
We know that wrapped Ethereum make use of the ethereum blockchain and the ETH is the cryptocurrency of Ethereum, which this in place, there is no room for external custodian of any form and this makes it independent.
wETH of TRON has to minted and burnt for you to transfer bor receive the token but in the case wETH of Ethereum, it has no burning process because for you to maintain the price..
Make an investment of at least $5 of a Wrapped token. Explain the process
These are the processes you have to following using JustSwap.
- Create a JustSwap account or use the app or a browser
- Link the JustSwap with TronLink
- The JustSwap is being opened
- Input the Amount of TRX you want to invest, in my case I will be using 15 which is 0.00002432 WBTC
- Then you can now press SWAP
- Another window will pop out, then you can noe press COnfirm swap
- Wait for a few minutes, Another window will pop out requesting for your signature,
- Just click sign in
- And confirm the transaction.
All the steps can be seen in the pictures below, they are arrange orderly.
4.- Explain in detail the Wrapped token of the TRON Blockchain. Show screenshot.
I hope you still remember about the partnership between the TRON and the BitGo on september, 2020, which made TRON to have the ability to make transaction with Bitcoin and Ethereum, making it to become a wrapped token of Bitcoin and Ethereum. This wrapped token was know as wETH and WBTC, and this became the first wrapped token to be in partnership with BitGo. BitGo controlled all the processes involving Minting , controlling and burning.
One important thing about these wrapped token on tthe TRON blockchain was that the value of the wrapped token was still the same with the native token or cryptocurrencies. E.g WBTC = BTC
Tokens worked effectively on this platform like the chart below.
wETH
And there are many other token on the platform making them to robust. These are some list below.
Some other wrapped token on the platform includes
Wrapped DOGE (WDOGE))
Wrapped Bitcoin Cash (WBCH)
Wrapped Dot (DOT)
and some many other more.
What is to mint a Wrapped token? What is burning a wrapped token? What is your function? Create an example explaining the process.
Knowing the fact that most of the blockchain are not compatible and this is really a great issue, to solve the issue, a concept was brought into the picture. Which is known as Minting.So what is Minting?
Minting wrapped token is the creation a new wrapped token, and the process is done by the custodian with the user generating a wrapped token from a blockchain to another blockchain. The process of minting is achieved by the user first paying or depositing a certain amount of token to a particular address by the custodian, the token is received by the custodain and the custodian will block the receive the token promptly, bringing out the same value of token that he receives . for instance if 5ETH is sent to the custodain, he will block the 5ETH and produce exactly 5wETH. And this 5wETH can also nbe used in another blockchain.
ANother concepts that is being used is called the Burning the wrapped token, so what is Burning? This is the opposite of the minting wrapped token that was earlier explained. In this case, if the user wants to convert the wrapped token back to the native cryptocurrencies, the process of burning is applied. In this case, if A certain amount of wETH is sent to the custodian. That ETH that was blocked will be released back to the user, after the wETH might have been burnt.
This concept of wrapped token has come to broaden the use of cryptocurrencies, by allowing you to send and receive different tokens to the same blockchain. This make the whole crypto space more interesting, and most of these transactions are fast, real, reliable and accurate. This have reduce the time that you wiill used to be swapping from one crypto to another crypto. This topic was really helpful, this has increased crypto knowledge because I was unaware of it.
Cc @pelon53