Wrapped Tokens - Crypto Academy / S4W6 - Homework post for pelon53.
Introduction
Hello Steemians,
I welcome you again to week 6 of season 4 in the steemit crypto Academy Community of steemit blockchain. I hope you have been enjoying this season since its commencement. I am Kehinde Micheal and my username is @msquaretwins here on steemit. I am happy to be part of this great Academy for this week and ofcourse for this season. I have gone through the powerful lecture delivered by professor @pelon53 on "Wrapped Tokens" in the intermediate class. Therefore, in this post, I will be answering the questions posted in the homework section in his post. Happy reading!
1. Name at least 2 Blockchains that use Wrapped BTC, excluding Ethereum, and show screenshots. Explain.
Each crypto is attached either to it own blockchain or the blockchain on which it is built. Crypto from a blockchain cannot function in another blockchain. For instance, (BTC)Bitcoin has it own blockchain called bitcoin blockchain and the ETH blockchain is ethereum blockchain. BTC cannot be used in ETH blockchain because it is not built on ethereum blockchain and as such, it is not compactible with it. And that's where wrapped token comes into play. To be able to use BTC on ethereum blockchain, wrapped token is used. wrapped token are token that make possible the habitation of a token built on one blockchain on another blockchain. Example of wrapped token are wBTC, wETH etc.
This question has asked me to least two blockchain that use wrapped bitcoin and to show screenshot and explain. Therefore, in the next paragragph I will mention and explain to blockchain that used wrapped bitcoin.
Two blockchain that used wrapped Bitcoin (wBTC) are:
• Tron Blockchain
Tron Blockchain Use wrapped BTC
sourceEarly this year, the CEO of Tron Foundation, Justin Tron tweeted about the launch of wBTC on Tron blockcahain. Tron foundation and Bitgo, the company in charge of wBTC partnered together to allow the use of wBTC on Tron blockchain as TRC-20. This partnership is done to help in the development of Decentralized Finance (DeFi) project built on its blockchain.
sourceThis will allow users to do tokenization of their asset and through wBTC minting. Therefore thos that hold wBTC would have opportunity to use BTC in any transaction that is done on Tron blockchain or any project that is built on Tron ecosystem. Additionally, this would reduce gas fee consumed in transacting with BTC.
BTC can be sent to Tron blockchain by using BTCTRON which is a type of wrapped token in Tron foundation. This can be done on Poloniex. Poloniex is one of the world leading trading platform that is built on Tron blockchain that support TRC 20. The value of BTC to BTCTRON is 1:1, meaning, 1 BTC is equal to 1 BTCTRON.
Binance Smart Chain (BSC)
Another blockchain that used wrapped bitcoin is Binance smart chain. Binance bridge is used to convert the bitcoin native token. As we know that currently there are wrapped BTC that are ERC-20 standard and TRC-20 standard. Binance bridge support the two standard. BEP-2 is a token standard.
The time for conversion is very short and it doesn't take to much. However, the processing depends on the blockchain from which the conversion is done. People need not to register account before they can use binance bridge because it is made open to any address.
But for a user who have binance account, wrapped bitcoin can be deposited and withdrawn using their BEP-2 or BEP-20 asset. This is demonstrated in question 3 where I bought WBTC with my asset on Binance account.
For binance bridge, "Peg in" and "Peg out" is used to achieve this function. Peg in is used to convert native token of a blockchain to binance smart chain token. And "Peg out" is used to convert the Binance smart chain token back to the native token. The "peg in" is done by selecting a chain from you are converting from in a binance chain or metamask. Then an addressed will be generated by binance brifge for you to deposit the fund to. After sending it, Binance Bridge will send you the corresponding wrapped token to your binance chain address.
sourceThe current price of Binance Pegged BTCB is $55,730.20 and the Market capitalization is $6,269,702,970.31 as indicated by red and and black box in the above screenshot respectively. The contract address is indicated in the screenshot by a green box and is : 0x7130d2a12b9bcbfae4f2634d864a1ee1ce3ead9c.
2. What is the difference between the wETH of the Ethereum platform and the wETH of the TRON platform? Explain.
The difference between wETH of the Ethereum platform and the wETH of the TRON platform are listed below:
• The main difference between wETH of Ethereum platform and wETH of TRON platform is that wETH of Ethereum platform is used for ERC-20 token or project built on ethereum ecosystem while wETH of TRON platform is used for project that is TRC-20 based on Tron blockchain.
• wETH of TRON platform is minted as TRC-20 on TRON ecosystem while wETH of the Ethereum platform is converted directly from ETH to wETH since it is built on ethereum blockchain.
• wETH of Ethereum platform cannot be used for DeFi project that is built on Tron ecosystem and wETH of Tron platform cannot be used for project built on Ethereum blockchain since the standard used for smart contract in both are different.
• Another difference betwen wETH of the ethereum blockchain and wETH of Tron platform is that wETH of the ethereum Platform is managed by ethereum blockchain. WHILE the wETH of Tron platform is managed by Bitgo company.
• wETH of etherum platform does not require minting and burning, it is converted directly feom ETH. But the wETH of Tron platform require minting and burning since Tron blockchain is not the custodian but the Bitgo company.
3. Make an investment of at least $ 5 of a Wrapped token. Explain the process with screenshots. You can use the JustSwap platform.
For this question, I will be using Binance exchange platform to make an investment.
• Firstly, I logged in to my Binance account. Below is a screenshot of my Binance verified account.
• Then the home page of binance App is displayed in a screenshot below
• Then from the home page, I clicked Trade as indocated by a red circle in the screenshot above
• I want to make investment on wBTC using BTC bit as as seen in the red box in the screenshot below, BTC/USD is currently there, so I have to change the pair by clickong on it.
• Then I searched for WBTC/BTC on the search bar as indicated by a red arrow in the screenshot below.
• Then we have WBTC/BTC on the trade page as indicated by a red box in the screenshot below
• I exchanged 0.0001BTC as indicated by a red arrow at a market price of 1.0008 as indicated by a black box in the screenshot.
• I then clicked buy WBTC as indicated by a blue box in the screenshot.
• Then the order was successfully executed and I went straight to history to get the overview of the order details. Below is the screenshot of the order details.
• The order was executed on 2021-10-12 at exactly 16:19:04 West African Time.
And the screenshot below show the total amount of 0.0001 WBTC in USD in my spot wallet as indicated by a red box.
4. Explain in detail the Wrapped token of the TRON Blockchain. Show screenshot.
The name of the wrapped token of the TRON blockchain is Wrapped TRX and the symbol is WTRX. And the type of this token is TRC-20 token as seen in the picture uploaded below. That means it is TRC-20 supportd token. The trading data for WTRX started in December 2020. The WTRX was developed to inprove the DeFi project built on Tron ecosystem. Holders of WTRX can swap it with TRC 20 token on justswap.
WTRX has an equivalent value of TRX. This means that 1WTRX is equivalent to 1TRX. To get WTRX, User will deposit TRX and then mint the corresponding amount of WTRX. Users can also convert the WTRX back to TRX by burning the WTRX and then the amount of WTRX burned will be deducted from their account and then be converted to TRX.
sourceThe current price of WTRX according to nomics.com is $0.0945 as seen in the screenshot above with a total supply of 17,622,010,076.888446WTRX. The contract address for Wrapped TRX's smart contract is: TNUC9Qb1rRpS5CbWLmNMxXBjyFoydXjWFR
Apart from WTRX TRC -20 token, there are also other wrapped tokens in Tron blockchain. Some of them are uploaded and listed below:
source
source• Wrapped BBS token
• Wrapped Duino-coin v2 (wDuCO)
• Wrapped void (wvoid)
• Wrapped FOT (DOT)
• wrapped Doge (wDOGE)
• Wrapped Bitcoin Cash(WBCH)
•Wrapped bitcoin (WBTC)
• Wrapped Ethereum (WETH)
•Wrapped BitTorrent (WBTT)
wBTC on Tron Platform
sourceWBTC on Tron blockchain was Issued on 2020-12-17 at exactly 08:14:50 (UTC). The Total supply of WBTC on Tron blockchain as indicated by a blue box in the screenshot is 99.89000964 WBTC and with 424 Addresses currently holding WBTC on Tron Blockchain as indicated by a green box in the screenshot above. The Contract is : TXpw8XeWYeTUd4quDskoUqeQPowRh4jY65 and it is indicated by a black box in the screenshot.
WDOT on Tron Blockchain
Wrapped DOT was issued on Tron Blockchain on 2021-01-21 at exactly 10:35:07 (UTC). The total supply 5,000.000000000000DOT. Two transfer has been made so far and two addresses are currently holding the token.
The contract is : TGiXFB3LwwxMPRhY4tUNHKfB5ntMD8bdrS
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 is a method used for creating a new wrapped token.
sourceThe first person that start the Minting process is the merchant and it is carried out by the custodian. Merchant are the institution that receive the Wrapped token and are in charge of distributing it to users. while custodians are institutions that have are in charge of of the asset and have power to generate keys that are used for minting.
As a way of illustration, let's say a merchant want to mint 10,000 BTC, the process to follow by thae merchant will be this;
i. Initiation of the of the minting by the merchant
ii. Merchant send bitcoin to the custodian
iii. Custodian mint wBTC with the help of the special key in his custody and send it as contract.
iv. Then merchant receive the wBTC token.
Burning is the process of converting wBTC back to the BTC. The only address that is permitted to do this is the merchant address and the stated amount to be converted back to BTC is deducted from the wBTC of the merchant.
sourceAs an illustration, let say a merchant needs 30BTC out of his wBTC. he will start to burn wBTC and the custodian will confirm the burn and then the amount of the burned wBTC will be deducted from his wBTC.
Conclusion
Wrapped token has made it possible to use the native token of a blockchain in another blockchain and that has in turn improved the world of Decentralized Finance. For instance before the introduction of Wrapped token, users who hold Bitcoin couldn't invest in DeFi Project that are ERC-20 standard based built on ethereum ecosystem. The introduction pf wrapped Bitcoin then made it possible for as many as are willing to invest in DeFi project to do so.
Additionally, with wrapped token, liquidity has been provided for many DeFi project in the crypto space. Many wrapped tokens have been created and many are still in the development phase. The future of cryptocurrency is without doubt a great one because of the many innovative ideas been from many institutions, companies and bodies to make users enjoy crypto investment.
Special thanks Professor @pelon who has presented this great topic in the Steemit Crypto Academy for Intermediate class.
Thank you for reading
Written by :- @msquaretwins
Cc:- @pelon53
Thank you Professor. @pelon53. I hope to participate in your next class.
👍
Hello @msquaretwins can you pls tell me how you sold the wBTC after buying. I have also bought for 5 usdt but now when I am selling, it is not selling on same price and the it is showing "entered invalid number".
@arpigupta08, the instruction for this task is to buy. I can see that you have bought but trying to sell it back. For you to do that you must have more than $10. You can buy wBTC with as low as $5 but the least you can sell is $10.
I hope I have answered your question.
Ohk thanks