1.- Name at least 2 Blockchains that use the Wrapped BTC, excluding Ethereum, and show screenshots. Explain.
One of the blockchains that make use of wrapped tokens is the Tron blockchain. The Tron blockchain was developed by Justin Sun in 2017 and has a native token with the ticker TRX, which is currently being used for transactions in the blockchain.
However, the coalition between Tron and BitGo in September 2020 led to the existence of a wrapped bitcoin which is known as WBTC, a TRC20 token that give users access to a lot of services, such as loan and transactions. This coalition was as a result of fulfillment of one of Tron's vision, which is to see to the development and integration of various decentralized applications and projects into the network.
Because other tokens from other blockchains are not compatible for use in the Tron blockchain, the wrapped BTC (WBTC) has come into play to allow the use of Bitcoin in the Tron network.
According to transcan, the WBTC at the time of writing has a total number of 430 holders and a total circulating supply of 99.89000964 WBTC tokens. There are also 18,760 transactions currently running at a price of $59,287. WBTC tokens can be swapped with Tron in the TronLink wallet and other exchanges like poloniex.
The solana blockchain is one of the fast-growing blockchain in the blockchain industry. It has a native token SOL, which has witnessed a major boom recently. The growth of this third generation blockchain is such that has left people in awe. There are lots of projects on the Solana blockchain such as Audius and maps.me.
The Solana blockchain uses a proof of history to produce timestamps for transactions. This alone has made the blockchain so popular and hence, there is need for the use of BTC. This is where they wrapped bitcoin (Sollet), which represent the real value of BTC, was clipped on the solana blockchain.
According to Solana explorer, wrapped bitcoin token (Sollet) has a current supply of 16,150.00 tokens at the time of writing.
It also has a current price of $59,508 and a market capitalisation of 1.1 trillion dollars. It also has a 24-hour trading volume of 41.2 billion dollars.
2.- What is the difference between the wETH of the Ethereum platform and the wETH of the TRON platform? Explain.
DIFFERENCE BETWEEN WETH OF TRON AND WETH OF ETHEREUM
TRC20 and ERC20 tokens are tokens that are used in the throne and ethereum blockchain respectively. There are some differences that exist between WETH on the Tron network and WETH of the Ethereum network. Let's discuss them below.
WETH of the Ethereum network are created under the standard of ERC20 tokens. In the same way WETH of the Tron network is created in the standard of TRC20 tokens.
There is an external custodian of WETH tokens of Tron network which is BitGo, who is responsible for issuing the token and also for its protection. They WETH of the ethereum network doesn't require any external custodian, because the ethereum network is the original blockchain of ETH tokens.
The transaction cost of WETH on the Tron network is cheaper and the transaction speed is faster than that of Ethereum blockchain.
The Tron's WETH requires burning in order to secure the token and also control its price. This is not so in the Ethereum blockchain. The WETH of the Ethereum blockchain is a representation of the native ETH token. ETH can be converted to WETH and can also be swapped back safely.
3.- Make an investment of at least $ 5 of a Wrapped token. Explain the process with screenshots. You can use the JustSwap platform.
In order to complete this transaction, I made use of my TronLink wallet. Here are the steps that I followed
Step 1: I logged into my TronLink wallet and headed straight to dApps where I have the JustSwap exchange. I clicked on JustSwap and I was redirected to the exchange.
Step 2: I clicked on swap where I was taken to a swap page.
In the page, there was a place to choose the token to swap from as well as the token I'm swapping to.
Step 3: I selected TRX as the token I'm swapping from and also chose to swap 57 TRX to WBTT. I then clicked on swap to continue.
Step 4: In the next page, I was shown the price of WBTT to TRX as well as the swap fee. I clicked "confirm swap" to continue.
Step 5: I was asked to choose authorization mode which is a safe mode for the swap. I did and clicked oncontinue.
Step 6: The swap process was ready and I clicked on Confirm to swap. My 57 TRX was successfully swapped to 1537 WBTT.
4.- Explain in detail the Wrapped token of the TRON Blockchain. Show screenshot.
WRAPPED TOKENS OF THE TRON BLOCKCHAIN
There are various wrapped tokens on the Tron blockchain which serve as a representation of the original token of another blockchain. These wrapped tokens have the same value with that of the original token. The Wrapped tokens of the Tron blockchain are;
While WBTC and WETH have external custodians responsible for safeguarding their value, WTRX and WBTT are original wrapped tokens that represent TRX and BTT on the TRON network. They do not have external bodies serving as custodians.
WBTC: This is a TRC-20 token that represents Bitcoin in the Tron blockchain. WBTC is a wrapped token under the custody of BitGo, the group that is responsible for the issuance and protection of the token.
The WBTC has the same value with that of the native BTC. With this token, Bitcoin can be used in the Tron blockchain under the guise of a wrapped token. This however has erased the problem of incompatibility of the tokens of two different blockchains.
The WBTC can be seen in the screenshot below with a total supply of 99.89000964 WBTC and a total of 433 holders. It also has a current price of $59,491.51 and a market capitalisation of $5,942,608.22.
WTRX: This is a wrapped TRX that has the same value with the native TRX token. The TRX token was created under the standard of TRC10. However, it can be said that WTRX has a compatibility with TRC20 standards. The services as well as the functions that TRC20 tokens offer can as well be accessed through the wrapped TRX (WTRX).
WTRX according to Tronscan has a current price of $0.09 which is the same value with that of the native TRX token at the time of writing. It has a market capitalisation of $1,708,108,097.66 and a total/circulating supply of 17,621,453,525.888 tokens.
WBTT: Wrapped BTT is an official BTT wrapping contract of TRC20. It is a contract that is concerned with the conversion of a TRC10 token to TRC20. This token is used within the Tron ecosystem to access some smart contract benefits as well as erase the problems that may come with TRC10.
WBTT has the same value with the original BTT token and it can be exchanged with other TRC20 tokens. It has a current market capitalisation of $158,794,190.46 and a current price of $0.0035.
WETH: This is a wrapped Ethereum that was introduced by BitGo to the Tron network after Tron's coalition with BitGo. BitGo is a custodian of the WETH token. It has the same value with ETHER (ETH), the native token of Ethereum. WETH has a current supply of 1,998.5988 WETH, a current price of $4,575.55 and a market capitalisation of $9,144,706.25.
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 of Wrapped Tokens
Minting of tokens has to do with the creation of new tokens for use in a blockchain. In the case of a wrapped token, minting is the process whereby a native token of a blockchain is being recreated, and this time in a wrapped form so that it can be used in another blockchain. This is how the process works.
Before a wrapped token is created, the blockchain that wants to use that token, which is known as the merchant will develop this idea, and then contact the custodian who will be the one to create (mint) the tokens. This custodian body will generate keys that will facilitate this creation.
Once the wrapped tokens are created, the custodian will enter into a contract with the merchant institution, and send the wrapped (minted) tokens to the merchant for distribution.
Burning of Wrapped Tokens and Functions
Burning a wrapped token is the process of converting a wrapped token back to the original/native token, which it was created to represent. This is applicable where there is a custodian because they are the only ones that carryout this duty.
Token burning is carried out to control the price and also secure the token. It seems to secure and stabilize a token, so that unnecessary double spending will not occur.
Example of Wrapped Token minting and Burning process
Let's take the Tron's wrapped BTC for instance. Tron is a network that doesn't support BTC. If I have 2 BTC that I want to use in the Tron network, since the coin is not compatible for use in the Tron network, I will look for a way to mint (convert to a wrapped token).
¶ Here, I will deposit my BTC with a merchant with a request for conversion.
¶ The merchant will forward my 2 BTC with my request to a custodian, let's take BitGo for instance.
¶ BitGo will receive my 2 BTC, lock it and issue 2 WBTC, sending it to the merchant.
¶ I will receive my 2 WBTC to use for transactions in the Tron network.
¶ If I want to burn the WBTC, that is, convert it back to BTC, I will send a request to the merchant to burn my WBTC.
¶ Once the request is received, the merchant will forward it to the custodian (BitGo) who will need to sign a smart contract and then my BTC will be unlocked while the WBTC is burned.
Wrapped tokens have so many benefits such as granting users access into a different blockchain/platform. In some cases, they serve as an updated version of a token. Having the same value with the original token, wrapped tokens also give the freedom of minting and burning without fear of losses. In all, it was such a great idea Introducing wrapped tokens into the blockchain industry.