Ethereum Traditional Receives DeFi Therapy With Packaged ETC
Ethereum Classic would like to play in the decentralized finance area (DeFi) of the blockchain, which it disputedly separated from in 2016.
On Wednesday it was announced that Ethereum Classic Labs, the biggest supporter of the ETC blockchain, has released Wrapped ETC (WETC) – an ERC-20 token that allows ETC holders to use Ethereum-based DeFi services such as trading, lending and borrowing can participate.
"We wanted to ensure that ETC could move to a different ecosystem and use different applications in addition to that ecosystem," said James Wo, founder and chairman of ETC Labs. "I assume that at least 10% of ETC owners want to participate and use WETC."
Wrapping uses a blockchain asset such as Bitcoin and issues an equivalent representation for another blockchain such as Ethereum. Wrapped Bitcoin (WBTC) is, for example, an ERC-20 token that is secured 1: 1 and whose Bitcoin is held in reserve by the qualified custodian, BitGo Trust. More recently, Zcash announced a packaged, DeFi-enabled version of the privacy coin.
Continue reading: Privacy Coin Zcash makes its Ethereum debut with Tokensoft and Anchorage
Where from ETC Labs indicated that WBTC tokens are supported and guaranteed by BitGo, a centralized entity. "What we have done here is use a smart contract so that staff can easily swap ETC for WETC by using a smart contract that is completely decentralized," he said.
This is similarly the case for tBTC by Thesis and renBTC by Ren.
WETC can be transferred or stored in any ERC-20 compatible wallet or storage mechanism, according to Wo. Under the hood, ChainBridge, a decentralized application that is connected to both the Ethereum Classic blockchain and the Ethereum mainnet, enables the transfer of ETC tokens over the bridge to the Ethereum mainnet. Then a certain amount of ETC is blocked in a smart contract and a corresponding amount of WETC is minted on Ethereum.
The release of WETC follows the launch of a DAI-ETC bridge, said Wo, which will allow ETC users to access MakerDAO's dai, a popular stablecoin in DeFi.
Ethereum Classic has a checkered history, starting with its creation in July 2016 from the Ethereum fork that followed the infamous DAO hack.
ETC, which is trading at around $ 5 today, hit an all-time high of $ 47 in December 2017, thanks not least to the enthusiastic support of crypto investor Barry Silbert, CEO of the Digital Currency Group, who also owns CoinDesk, is to be owed. Ethereum's native asset, Ether (ETH), is currently trading for nearly $ 500.
The ETC blockchain was exposed to a series of 51% attacks in August. We agreed that the introduction of WETC will help restore ETC's reputation.
"I'll say the ETC network is very secure right now so you can trust it," he said. "We also build applications directly over the ETC network and use WETC to traverse the Ethereum network."
Continue reading: Ethereum Classic Labs Air's New Plan to Stop Future 51% Attacks
In any case, Wo sees a bright future ahead as ETC holds onto its Proof-of-Work-Mining-Cannons (PoW) as Ethereum tackles the difficult and advanced leap to Proof-of-Stake (PoS).
"Not everyone trusts PoS, some projects believe in PoW," said Wo. "I think part of the ecosystem is likely to stick to ETC or other PoW versions of a blockchain that can do smart contracts."
Correction (November 18, 15:14 UTC): Technically, Ethereum "forked" from what became Ethereum Classic. The first paragraph has been changed to make this clearer.