[ad_1]
Ethereum Classic wants to play in the decentralized finance (DeFi) space of the blockchain from which it controversially split in 2016.
Announced Wednesday, Ethereum Classic Labs, ETC’s biggest blockchain advocate, has released Wrapped ETC (WETC), an ERC-20 token that allows ETC holders to participate in Ethereum-based DeFi services such as trading, lending and lending.
“We wanted to make sure ETC could move to a different ecosystem and use different applications on top of that ecosystem,” said James Wo, founder and president of ETC Labs. “I expect at least 10% of ETC holders will want to participate and use WETC.”
Wrapping is the act of taking a blockchain asset such as bitcoin and issuing an equivalent representation on another blockchain such as Ethereum. Wrapped Bitcoin (WBTC), for example, is a supported ERC-20 token on a 1: 1 basis with bitcoin held in reserve by the qualified custodian BitGo Trust. More recently, Zcash announced a packaged and DeFi-ready version of the privacy coin.
Read more: Privacy Coin Zcash makes its Ethereum “Wrapped” debut with Tokensoft and Anchorage
Wo of ETC Labs pointed out that WBTC tokens are backed and secured by BitGo, a centralized entity. “What we have done here is to use a smart contract so that people can easily trade ETCs with WETC using a smart contract that is totally decentralized,” he said.
This is similarly the case with Thesis’s tBTC and Ren’s renBTC.
WETC can be transferred or stored in any ERC-20 compatible wallet or storage mechanism, Wo said. Under the hood, ChainBridge, a decentralized application that interfaces with both the Ethereum Classic blockchain and the Ethereum mainnet, allows the transfer of ETC tokens to the Ethereum mainnet via the bridge. Then a specified amount of ETC is locked into 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, Wo said, which allows ETC users to gain access to the dai of MakerDAO, a popular stablecoin in DeFi.
New beginnings
Ethereum Classic has a checkered history, starting with its appearance 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 in large part to the enthusiastic support of cryptocurrency investor Barry Silbert, CEO of Digital Currency Group, who is also the owner of CoinDesk. For context, Ethereum’s native asset, ether (ETH), is now trading at nearly $ 500.
ETC’s blockchain was subjected to a series of 51% attacks in August. Wo agreed that the emergence of WETC will help rebuild ETC’s reputation.
“I will say that the ETC network is very secure right now, so you can trust them,” he said. “We are also building applications directly on the ETC network, as well as using WETC to go through the Ethereum network.”
Read more: Ethereum Classic Labs Launches New Plan to Stop Future Attacks by 51%
Either way, Wo sees a bright future ahead of him as ETC sticks to its proof-of-work (PoW) mining guns, while Ethereum takes the difficult and extensive leap to proof-of-stake (PoS).
“Not everyone trusts PoS, some projects believe in PoW,” Wo said. “So I think part of the ecosystem will likely stick to ETC or other PoW versions of a blockchain capable of making smart contracts.”
Correction (November 18th, 15:14 UTC): Technically, Ethereum “forked” from what became Ethereum Classic. The opening paragraph has been changed to make it clearer.
