Decentralized finance (DeFi) ecosystems have enjoyed a great year in 2020, attracting the attention of a large number of investors and companies, such as Ethereum Classic Labs, which presents its WETC to join this decentralized universe.
James Wo, founder and CEO of Ethereum Classic Labs, announced the launch of its token Wrapped ETC (WETC), as reported by Decrypt. This new token will allow users and investors of the cryptocurrency to enter the universe of decentralized finance (DeFi), in a similar way to how the well-known Wrapped Bitcoin (WBTC), a token held by BitGo that has a 1:1 relationship with Bitcoin and is based on the blockchain of Ethereum.
According to Wo's statements, WETC will serve as a gateway for ETC users to products in DeFi, such as lending, decentralized trading, smart contracts (smart contracts) and decentralized applications (dApps). This new token opens up a world of possibilities for these users. They will now have easy access to the benefits of the promising financial universe that is DeFi, which currently enjoys liquidity of more than $13 billion.
WETC is a token ERC-20 based on the blockchain from Ethereum and backed on a 1:1 basis with ETC, the cryptocurrency native to Ethereum Classic. The idea behind the launch of this new token, in addition to offering new products to its users, is also to increase user participation within the network, as well as being a way to unify the cryptocurrencies of both networks that have the same origin.
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DeFi, the rapidly expanding digital economy
Wo, the president and co-founder of ETC Labs, stated that decentralized finance ecosystems are becoming more and more consolidated every day as a fundamental part of the digital economy and that the situations that global society is currently facing are helping them to consolidate faster than expected.
“The realities of a global pandemic and economic crisis are cementing DeFi as an integral piece of the rapidly expanding digital economy.”
In just a few months, DeFi has achieved an astonishing growth of over 1.300%. Going from having a total liquidity of $1.088 billion in June to over $13.681 billion as of today, as shown by DeFiPulseThis growth is due to the potential of DeFi to provide essential financial services in society, such as trading, savings, loans and more, but in a decentralized way, since it facilitates access to these products and services to millions of people located in remote, unbanked areas and without access to traditional financial systems.
Given this reality, decentralized finance, despite its many risks, represents a solution to these problems that are gaining strength and that every day becomes an essential part of positive change in society. Wo assures that thanks to all these features and benefits, the Ethereum Classic Labs team is proud to bring and facilitate access to DeFi to ETC users through the launch of its new WETC token.
What is Wrapped ETC or WETC?
To answer this question, Wo stated:
“Basically, it’s a bridge for all ETC token holders to use different services, thereby ensuring that their tokens are more valuable.”
WETC is then an ERC-20 token that makes ETC a compatible asset represented within the Ethereum blockchain, so it has and provides access to all the products and protocols that are developed in and on this blockchain network (ETH). WETC users can access the different ecosystems that are developed on Ethereum, such as smart contracts, decentralized applications, games and of course, DeFi, participating in projects such as Uniswap, among others.
So far, Ethereum Classic is the latest project to announce a “wrapped token” for its entry into the decentralized finance universe. While Zcash, a cryptocurrency project based on user privacy, launched its own token WZEC at the end of October, entering the decentralized exchanges (DEX). The person in charge of this launch was Wrapped, who stated that WZEC aims to “allowing greater utility for Zcash holders without sacrificing privacy”, which is a feature of cryptocurrency.
The ETC community and the new token
The launch of WETC also seeks to encourage user participation in the network, as a way to recover ETC's reputation after having been the victim of several 51% attacks in August. During these attacks, ETC lost several million dollars in assets, leading exchanges to shut down their cryptocurrency trading immediately. Some exchanges, such as OKEx, even announced that they might delist ETC from their cryptocurrency listings if the platform failed to ensure the security of the network.
However, during the month of September, the ETC development team activated a program called ETC Network Security Plan, which aims to provide the network with the security and stability necessary to prevent future attacks.
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