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

Hello mates, its week 6 of the 4th season of Crypto Academy already and its been wonderful so far. Huge credits to all the professors for the good work done so far. This is my submission for @pelon homework task on wrapped tokens.

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

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We understood from the lecture that Wrapped tokens simply is a cryptocurrency tokenized to be compatible with other blockchains. Thus, Bitcoin cannot be used on the Ethereum blockchain unless it s wrapped so we can have wBTC which is Wrapped BTC and wETH which is wrapped Ethereum among other examples.

Two blockchains that use Wrapped BTC

• Tron Blockchain

Earlier this year, the founders of the Tron blockchain network collaborated with Bitgo to develop BTC wrapped token wBTC to be able to operate on the Tron network as a TRC-20 token. This move was to increase interoperability among the two blockchain networks and also aid in the development of Defi projects on the Tron network. Bitgo acts as the custodian of the wrapped BTC token. It is worth noting that, the value of wBTC is almost the same as the value of BTC itself as it is pegged against it.

Below are details of wBTC on Tronscan at the time of preparing this work.

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• Binance Smart Chain

The wrapped BTC on the Binance Smart chain in BTCB also pegged against the value of the regular BTC. With BTCB, users can now enter the Defi space while holding their BTC without the need of trading the BTC for a compatible token and go about their activities. BTCB is BEP2 token backed by BTC. The BTCB token is generated using the Binance Bridge once you make the BTC deposit and with the same medium you can withdraw the token.

Below are details of BTCB on BSCScan at the time of preparing this work.

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

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Despite they are both wrapped tokens of Ethereum, they are different because they run on different blockchain networks. Below are some important differences between the two.

• The very first difference is that wETH of the Ethereum platform is Ethereum tokenized or wrapped to be used on the Ethereum blockchain network only whereas wETH of the Tron platform is Ethereum tokenized to be used on the Tron blockchain network only.

• With the wETH of Tron platforms, an intermediary, Bitgo acts as the custodian of the token and performs the minting and burning of the token whereas with wETH of Ethereum platform, there is no need for mining since it is built on the same Ethereum blockchain network. It is converted directly.

• wETH of Ethereum has no intermediary acting as a custodian or anything of that sort whereas with wETH of Tron, Bitgo acts as the custodian of the token.

• wETH of Ethereum platform cannot be used for DeFi projects built on the Tron ecosystem same way wETH of Tron platform cannot be used for project built on Ethereum blockchain because the standard used for smart contract on both platforms are different.

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

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I will perform this trade through Binance.

First log in to your Binance account.

_{proof of verification}

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Hit the trade tab to enter the market.

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Change the crypto currency pair here to the one you want to trade with. In my case WBTC/BTC

I use the search bar and enter WBTC/BTC. Select it and the crypto currency should change and you are set to trade.

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Enter the amount of WBTC you want to buy and hit Buy WBTC

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Trade is executed as you can see in my order history here

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See it here in my wallet now.

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

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For blockchain networks interoperability, the Tron blockchain has integrated a number of wrapped token to allow users who hold the original tokens of these wrapped token to use them on the Tron blockchain network.

From Tronscan, there are about 4 active wrapped token that can run on the Tron blockchain.

• Wrapped BTC (WBTC)

BTC can now be used on the Tron network using its wrapped token WBTC. Like I earlier said, this will enable users to hold their BTC while taking advantage of the Tron network to develop Defi projects.
See details from Tronscan below.

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• Wrapped Ethereum (WETH)

Ethereum can also be used on the Tron blockchain using the wrapped token WETH. Like WBTC, it is also made possible by the aid of Bitgo.
See details from Tronscan below.

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• Wrapped BTT (WBTT)

WBTT is a TRC20 token, which means you may exchange it for any other TRC20 token on JustSwap.
The original, BTT is a blockchain-based TRC10 utility token that enables features of the world's most widely used decentralized protocols and applications.
See details from Tronscan below.

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• Wrapped Tronx (WTRX)

This is the wrapped token of the native token on the Tron network, Tronx. WTRX token is a TRC-20 token too and is just like the original Tronx.
See details from Tronscan below.

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

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Minting is the process a cryptocurrency or token gets wrapped before it can be used on another blockchain. In the case of WBTC, this is where Bitgo plays an important role. As custodians of the wrapped token, they facilitate the making of original tokens wrapped tokens.
Below is an illustration to explain this proper.

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Burning token on the other hand is simply taken wrapped token back to its original. For instance, changing WBTC to BTC will be burning. When the user or merchant wants to withdraw his token, he can always change the wrapped token back to a regular token. Remember the value of a wrapped token is usually the same as the original token. With Burning, it is the merchant who can undertake the process using his address.
Below is an illustration to explain this proper.

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A classical example is for instance a merchant wants to get an amount of 2000BTC on the Tron network. BTC is not compatible with the Tron blockchain network unless it is a wrapped BTC. To get BTC wrapped (WBTC) is the minting process and when the merchant wants to get his BTC back, the process involved is burning as demonstrated in the illustrations above.

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Conclusion

Wrapped tokens simply is a cryptocurrency tokenized to be compatible with other blockchains. Wrapped tokens for example WBTC, WETH among others allows token to be used across different blockchain network enhancing interoperability.

There are many wrapped token been developed because of its numerous advantage and how they allow users or developers to explore different blockchain with the tokens they hold without worrying about compatibility issues which is positive for the growth of the entire blockchain ecosystem.

Thanks for reading. Big credits to @pelon53 for yet again another wonderful lecture.

Regards

@kayduke