Bender Labs’ WRAP Protocol Brings Ethereum ERC-20 & ERC-721 Tokens to Tezos
- DeFi developer Bender Labs rolls on a decentralized bridge that connects Ethereum and Tezos blockchains.
In an official announcement, Bender Labs revealed the release of wrap protocol (WRAP), a decentralized bridge that now enables the transfer of ERC-20 and ERC-721 tokens from Ethereum to Tezos blockchains. This means that Ether (ETH) holders are free to interact with the Tezos platform.
Token wrapping has gained momentum in the recent past as a popular way of linking users of different blockchain networks. The best example is Wrapped Bitcoin (WBTC), an ERC-20 form of Bitcoin found on the Ethereum blockchain.
Importantly, wrapped tokens are created with the capacity to maintain the complete characteristics of the original tokens comprising the price. For instance, a Wrapped Ethereum (WETH) is redeemable as a standard Ethereum (ETH), locked within the native blockchain.
According to the announcement, the Wrap protocol will allow clients to transfer ERC-20 and ERC-720 into FA2 tokens found in the Tezos blockchain network. The ERC-20 can be described as the technical standard upon which most common Ethereum tokens have been developed, such as Uniswap (UNI), Maker (MKR), Chainlink, Dai, and others.
On the other hand, ERC-721 is used for NFTs, non-fungible tokens which have gained traction among crypto enthusiasts and worshippers. NFTs can be described as cryptographically unique tokens representing virtual content like music and other forms of art. As opposed to other tokens, NFTs do not support interchangeability; therefore, they can easily be used to create scarcity for the virtual content.
To transfer Ethereum-based tokens towards the Tezos network, the WRAP protocol forms wTokens, which is a representation of both ERC-20 and ERC-721 tokens. Bender Labs states that wTokens worth will be equal to the original assets and can be used comfortably in the Tezos network.
“At the center of WRAP is the $WRAP token, which is both an ERC-20 and an FA2 token,” said the developers.
According to the announcement, a clear use case in transferring Ethereum tokens to various blockchains is the ever-growing decentralized finance (DeFi) space. Most of the Defi business takes place within the Ethereum network, but high transaction fees lead to clients looking for alternatives.