Wrapped Tokens - Crypto Academy / S4W6 - Homework post for pelon53.
greetings to you all, it is a pleasure that we are hear again, and I will be going straight to the answers to the questions as an excellent lecture has been delivered by @pelon53
designed by me from canvas1.- Name at least 2 Blockchains that use Wrapped BTC, excluding Ethereum, and show screenshots. Explain.
there are a few blockchains that have incooperated the wrapped BTC into their blockchain for this question, I will be talking about the BSC (Binance Smart Chain) and the TRON blockchain
BINANCE SMART CHAIN (BSC)
The in-cooperation of the bitcoin in various blockchains has increased rapidly, and because the binance has their users at their best interest, it decided to evolve with the on going trend to integrate the bitcoin into it's system. This evolving was made possible through the Binance Bridge project which helps increase the ability of blockchains to build upon each other and also be compactible with one another.
The wrapped bitcoin on the Binance Smart Chain is called BTCB which is a BEP20 asset on the binance smart chain. It works with a 1:1 peg(wrap) format inotherwords, the amount of BTC locked is an equivalent to the amount of BTC wrapped
HOW IT WORKS
It works solely through the Binance bridge which serves as a decentralized means of transfer between the bitcoin blockchain and the binance smart chain
It is a very simple and direct process, first it is expedient that you have a wallet that supports the BTCB token, one good and great thing you need to note is that the binance bridge takes no fee for the transaction although fees may be deducted from the respective blockchains used for the transaction.
For instance I want to convert 2BTC to my binance smart chain network, first I would deposit 2 BTC on my binance chain account, then make a transfer through any Dapp that supports the BTCB, there are a few of them examples Binance Chain Wallet, BitKeep, MathWallet. etc) to our Binance Smart Chain then we will receive an equivalent of 2BTCB
below are the informations about the BTCB token
bscscanTRON BLOCKCHAIN
Just like the BSC blockchain, the Tron blockchain is another blockchain that has incooperated the BTC in the wrapped format as BTCTRON it also works as 1:1 value of the BTC equivalent to the BTCTRON, For Instance a 2BTC value wrapped will equal a 2BTCTRON value
This is made possible by the TRC-20 tokens some of which are an equivalent of real cyptocurrencies that could be transacted within other blockchains
In other to access this wrapped token we would resolve to the tronlink wallet or some other type of DEX and we could see the different wrapped tokens
HOW IT WORKS
The introduction of the wrapped BTC on TRON netweork was made possible by BitGo who went all the way to ensure the integration of the BTC as a tokenized asset. BitGo also launched other wrapped tokens like the wETH giving the platform 2 of the biggest assets on the tron network
In other to get this wrapped tokens in the tron network, the BTC will be sent through an address guided through by the BitGo, keeping the platform simple and verifiable. It is also important to note just like I mentioned before that the equivalent value of Bitcoin sent through the BitGo address will be receive as the wrapped Bitcoin.
the reversal process from the wrapped bitcoin to the BTC is the same just walk back through the process. Below are the details of the Wrapped Bitcoin
SOURCE
2.- What is the difference between the wETH of the Ethereum platform and the wETH of the TRON platform? Explain.
Although that they are both wrapped Eth on different platforms they do have differences before I move into details explaining both wrapped ETH on the platforms if you guessed that the first difference is that they are on two different platforms, then you guessed right.
wETH ETHEREUM
The normal ETH was first created before the wETH which was a project of ethereum in other to aid ETH trade with other ERC-20 tokens which uses a smart contract and to ensure that data and details do not get lost, all tokens have to be traded on the same format which is the sole purpose of the creation of the wETH to trade with alt coins
This wETH doesnt need to burn to maintain its price, it is just a presentation of the ETH on the Decentralized platform, which can function or act as a stable coin of the ETH on the decentralized system.
wETH TRON
on the tron network unlike the wETH on the Ethereum platform that is powered by the Ethereum, the wETH on the Tron network is powered and protected by BitGo the wETH on ethereum works on the ERC-20 tokens the wETH on the Tron network works on the TRC-20 tokens
if we recall I mentioned earlier that the wETH on the ethereum platform does not need to burn to determine it's price as it functions as a stable coin of ETH on the decentralized system on the contrary, the wETH of the tron network has to burn to determine it's price taking it out of the decentralized platform as it is being handled by BitGo and external body.
3.- Make an investment of at least $ 5 of a Wrapped token. Explain the process with screenshots. You can use the JustSwap platform.
- first of all it is important that you have your tronlink wallet so you can connect it the just swap website, the platform is quite user friendly and understandable. below is the interface of the justswap website. click on connect wallet to commence the process
justswap
justswap- As long as you have your tronlink wallet chrome extension on your laptop, it is easy to make the connection, a popup requesting the connection will be displayed, click on connect to continue.
justswap- I will be making a swap of 30 Tron for WBTT, click on swap
justswap- here I will be confirming the swap after cross-checking that there was no error in my details
justswap- at this point the justswap will be requesting a signature to confirm the transaction
justswap- Below is a confirmation that the swap has been completed
justswap
4.- Explain in detail the Wrapped token of the TRON Blockchain. Show screenshot.
On the tron blockchain, there are majorly 4 wrapped tokens and I will be explaining them in the following order, the tokens are; WTRX, WBTT, WBTC, WETH
WTRX
Although the tron currency is compatible on the Tron blockchain, the Tron network still thought it wise to produce a wrapped token for them selves for reasons best known to them. This for starters is the offical wrapped token of the TRON blockchain network. below are the details of WTRX
tronscanWBTT
the WBTT is a tron token of the TRC-20 smart contract that could be swapped with other tokens on the TRC-20 smart contract. the original BTT coin is a TRC-10 token, more like a utility token that covers different features on the blockchain. Below are the details of WBTT.
tronscanWBTC
As explained earlier this is a token introduced by BitGO , which the entire process is carried out by BitGO, it burns and mints the whole process to make the conversion. This is a TRC-20 token and is different from the ERC-20 WBTC token as explained earlier. works on a 1:1 wrapped basis. Below are the full details of the WBTC.
tronscanWETH
also the WETH just like the WBTC was also introduced by BitGo. It is a TRC-20 token and is different from the ERC-20 WETH. however, same way just like the WBTC it is minted and burned by the BitGo process to initiate the conversion . it also works on a 1:1 wrapped basis. below are the details of the WETH.
tronscan5.- What is to mint a Wrapped token? What is burning a Wrapped token? What is your function? Create an example explaining the process.
The word Mint as I could recall from my little days were refered to a new set of currencies that had a unique smell and a smooth feel of touch. before I go into a proper definition of minting a wrapped token, If we could recall from what I said earlier that most coins have their original cryptocurrencies but with the limitation of not being able to function on all blockchains a major reason why the wrapped tokens where created.
Minting a wrapped token is the creation process of that wrapped token, so when a user deposits the original currency to the primary producers of the wrapped cryptocurrency, they generate the token and make them accessible in the blockchain in which it could function according to the terms of the wrapped tokens
Burning a wrapped token is simply the reversal process of minting a wrapped token, more like a build up and a breakdown, so peradventure a user decides to convert his wrapped token to the original form, the reversal process is called the burning of the wrapped token done by the primary producers of the token to reverse it back to it's original form.
The function of these wrapped tokens is quite understandable and easy to comprehend. it was created with the intent of one currency to be able to coexist in another blockchain other than its own if possible, It helps maximize liquidity and enhance exchange in both centralized and decentralized platforms. they also help to bridge the gap and make transaction fees lesser and the process faster.
FOR EXAMPLE
Nikoyana has 2BTC and wishes to perform a transaction on the tron network, we already know in it's natural form it isn't possible so nikoyana would make a transfer through the primary producer of the WBTC which is BitGo and would receive an equivalent in the tron network after it has been minted by BitGo
Likewise after the transaction he wishes to return back to his original bitcoin wallet in the natural form he makes a transfer through the primary producer of the WBTC which is BitGo and the reveral process is called the Burning of the wrapped token.
CONCLUSION
The homework post is an eye opener as we have really learnt something new today about wrapped token and coexisting in different blockchains and it also boils down to the fact that we all need an inter-connectivity to survive among ourselves, no man is an island.
The wrapped tokens has its advantages one of which is the interoperability and also has its disadvantages one of which is the fact that most has to pass through a custodian.
In general I think it's a great technology and the fact that blockchains could work with each other is an amazing feature, thank you all for reading through my post.
Best regards
@pelon53