Wrapped Ether (Optimism)

WETH

WETH is a DeFi-compatible version of ETH. ETH is the native currency of the Ethereum chain used for gas fees and security.

Risk Rating
Best
$3,472.39
3.98%
Summary
What we like
WETH is a wrapped version of ETH that enables it to be more easily used within DeFi. The transition this September to a Proof-of-Stake (PoS) consensus mechanism is expected to bring with it drastic improvements in scalability, an increase in staking yield, lower carbon footprint, and reduced ETH supply.
What we like less
ETH transferred through the Optimism bridge requires more trust assmptions as the bridge depends on a centralized sequencer who can control the ordering of transactions.
What it means for you
ETH represents one of the most liquid assets available to be used for lending, market making and staking.
Information
Blockchain
  • Optimism
Info
Key Metrics
  • Fully Diluted Valluation: $10.5B
  • Total Supply: 3,013,374
  • Volume (24H): $3.5B
  • ATH: $4,863.70 (11/10/2021)
  • ATL: $0.00 (10/28/2020)
Risk Assessment
Best
Asset Strength

Wrapped Ether is a large-cap asset that represents the protocol`s native governance or utility token. This asset is exposed to the underlying risks of Optimism bridge, a protocol rated as Average.

Asset Tokenomics

Wrapped Ether has an uncapped supply but has inflation control or burn mechanisms in place. ETH on Optimism is backed 1:1 by ETH locked in the Optimism bridge protocol on the Ethereum chain. ETH is "wrapped" to make it compatible with DeFi smart contracts. 1 Wrapped ETH is always equal to 1 ETH.

Asset Volatility

Wrapped ETH is highly correlated to the overall market.

Dependencies

Optimism Bridge

Things to know about WETH

What is the difference between Ether and Ethereum?

Ether can be thought of as the "fuel" or gas fee that powers the Ethereum network. Ethereum refers to the actual blockchain technology or smart contract platform that underpins Ether. Whenever you send ETH or use an Ethereum application, you must pay a fee in ETH to use the network. This fee acts as an incentive for a block producer to process and verify your transaction.

Why does Ether have intrinsic value?

Ether serves two main purposes: one as a gas fee to transact on the Ethereum network and second as a speculative store of value. Currently, Ethereum users pay the transaction fees in ETH and ETH holders bear the cost of inflation from miner block rewards. In the absence of speculation, ETH holders are betting that demand for ETH from users of decentralized applications (dApps) outpaces the rate of inflation via block rewards. The second purpose comes from its monetary premium as a non-sovereign store of value. With the transition to ETH 2.0 and recent changes to its monetary policy (EIP-1559), ETH is expected to better compete with BTC as a monetary asset given its scarcity, durability and censorship-resistant qualities.

What is Ether used for?

Ether is used within the Ethereum ecosystem to perform a range of functions, including its native use as a gas fee to transact on the network, use as collateral for DeFi lending applications (to be lent or borrowed), use as medium of exchange for alternative crypto assets and non-fungible tokens (NFTs), acceptance in select retailers and service providers, and lastly, earned as reward for completing bounties. Additionally, in ETH 2.0, users will also be able to lock their ETH by becoming a validator to help secure the network in exchange for block rewards and transaction fees.

WETH Pools
Yearn ETH Market Making
16.9%
Yield
$5M
TVL
Risk
D
Protocol
Yearn
Chain
Optimism
Aura ETH Market Making
5.3%
Yield
$5M
TVL
Risk
C
Protocol
Aura
Chain
Optimism
Sonne ETH Lending
2.7%
Yield
$2M
TVL
Risk
C
Protocol
Sonne
Chain
Optimism
Yearn ETH-USD Market Making
29.3%
Yield
$1M
TVL
Risk
C
Protocol
Yearn
Chain
Optimism
Gamma BTC-ETH Market Making
21.3%
Yield
$679K
TVL
Risk
C
Protocol
Gamma
Chain
Optimism
Yearn BTC-ETH Market Making
23.4%
Yield
$414K
TVL
Risk
D
Protocol
Yearn
Chain
Optimism