Whether it is the issuance of the cross-chain asset wETC, the advance layout of the Polkadot ecology, or even ETC’s own support for the development of DeFi projects on its network, it all demonstrates ETC’s determination to explore the DeFi world.
Written by: Ad
In recent months, more and more investors have bet on the long-term value of DeFi. According to Debank data, as of now, the total lock-up value (TVL) of the DeFi market has exceeded $17 billion, an increase of 17 times from the 1 billion TVL six months ago. In this exponential growth trend, we have also seen the participation of projects other than Ethereum in the DeFi ecosystem. The total lock-up value of BTC-anchored coins has reached 2.81 billion yuan, accounting for approximately 16.5% of the entire DeFi market. And wBTC ranks second in the DeFi market with a lock-up value of 2.3 billion.
The rise of cross-chain assets has become inevitable. From the perspective of trend development, more and more public chain projects are adopting cross-chain bridges to adapt to Ethereum, in order to realize the value capture of Ethereum and the cultivation of assets on the chain. Among them, the cross-chain asset wETC launched by Ethereum Classic (ETC) may become a brighter future star.
On October 30, James Wo, the founder and chairman of ETC Labs, revealed at the Web3 conference that ETC Labs has reached a cooperation with Canadian technology company Chainsafe and will launch the cross-chain asset wETC in November. According to its introduction, ETC will use the Ethereum Classic Bridge (ETC Bridge) to cast the cross-chain asset wETC on Ethereum. This means that through the ETC bridge, ETC will be tokenized on the Ethereum blockchain.
What is wETC?
wETC is a cross-chain asset issued by the ETC team on Ethereum through the Ethereum Classic Bridge, also known as “cross-chain asset wETC”. wETC has passed all tests and is officially expected to be launched at the end of November. After its launch, wETC will list multiple decentralized exchanges such as UniSwap and Bancor.
wETC is 1:1 linked to ETC. Each wETC token has an ETC endorsed by it, so the minting of wETC will not increase the total supply of ETC tokens. The issuance of wETC will also ensure that it can be verified on the blockchain, and a professional review agency will conduct a security audit to effectively protect the interests of investors.
Advantages of wETC: Backing on ETC to achieve maximum compatibility
As we all know, ETC is the forked currency of Ethereum at 1,920,000 blocks. In recent years, the core development trend of ETC projects is to continuously improve compatibility with the ETH network. Beginning in the second half of 2019, the ETC team has carried out three network upgrades respectively for the Atlantis hard fork, the Agharta hard fork and the Phoenix hard fork, thereby improving the compatibility and interoperability with ETH, and even The DApp on the ETC network communicates directly with the DApp on ETH, and finally realizes a true cross-asset chain. Not only that, in the future, ETC will also achieve ecological integration with DeFi, Polkadot, IPFS and other fields.
Christian Xu, ETC Asia-Pacific Community Manager, once said at the “Open Finance Conference-Xiamen Station” branch of the “The 3rd China (Xiamen) International Blockchain + Business Future Development Summit” co-sponsored by Linkwen & Winkrypto:
ETC and Ethereum are originally homologous. At present, it is exactly the same as Ethereum from the bottom of the technology and the functionality that can be achieved. In terms of developer tools, the current ETC development tools and Ethereum development tools can be used with each other, but each has its own merits. The weak point of ETC now is that the assets on the ETC chain are not as rich as Ethereum
ETC currently has more than 20,000 users worldwide. In this context, compared with other cross-chain assets, wETC has inherently strong compatibility with ETH and a user base.
The introduction of wETC can make full use of the composability of DeFi on the Ethereum platform, allowing ETC assets to quickly integrate into existing diversified DeFi protocols. For example, wETC can be transferred and sold in various decentralized exchanges, and users can use wETC tokens as collateral assets to borrow or create ETC mortgage loans on the lending platform. According to official sources, ETC Labs is still docking with lending projects like Maker, Compound and other liquid mining projects such as Swap, SushiSwap, and SashimiSwap, which will promote wETC to become mainstream in the DeFi ecosystem.
The launch of wETC, on the one hand, increased the asset circulation of ETC and enriched the ecological application of ETC. On the other hand, wETC is also an important step for ETC to expand into the DeFi field, and promotes ETC’s own exploration of the DeFi ecosystem through cross-chain. At the same time, since the upper limit of the supply of ETC is determined by the PoW algorithm and has a fixed monetary policy, the wide application of wETC will also feed back the increase in the value of ETC.
The “glue” that bridges ETH and ETC
Starting from wETC itself, compared with the centralized implementation of wBTC (hosted by Bitgo), wETC is realized through a decentralized solution jointly constructed by ETC Labs and Chainsafe, and the solution has been fully reviewed.
ETC can be transferred to the Ethereum mainnet through the Ethereum Classic Bridge. At that time, a specified amount of ETC will be locked in the smart contract and a corresponding amount of wETC will be minted on Ethereum. Users can participate in the DeFi project in the ETH ecosystem through wETC to obtain income; After the mapping action is completed, the user can also transfer wETC back to ETC through the Ethernet Classic Bridge. Similarly, the corresponding amount of wETC will be destroyed, and the ETC network will unlock the same amount of ETC tokens.
In fact, the cross-chain process is not complicated, but it especially tests the technical team’s ability and understanding of the Ethereum blockchain. Information from Block123.com shows that ChainSafe, located in Toronto, Canada, is a team composed of developers and academics, focusing on using blockchain to propose solutions. ChainSafe often organizes Ethereum developer gatherings locally, including Toronto Rust Developers Meetup, benToronto, The Toronto Creative Commons Film Festival, etc. Customers that have been served include Shyft, Bunz, Aion, Polymath, Arkilio, CoinLaunch, and its internal projects include eth-drive, the first disk utility dedicated to generating offline Ethereum wallets.
It can be said that ChainSafe technically provides security for the operation of wETC, and the ecology of ETC itself is also promoting the application and development of wETC.
Take the lead in laying out the Polkadot ecology and be an early participant in the integration ecology
The ambition of ETC Labs is not just the Ethereum ecosystem. According to reports, it will also cooperate with the blockchain technology company Snow Fork to develop the Polkadot-based ETC Bridge. The ETC bridge chain will enable ETC assets and Polkadot assets to circulate across the chain, and even in the form of a bridge chain as a parallel chain to communicate with other Polkadot ecological blockchains in the future.
The ETC bridge chain has two major functions technically. In the early stage, the ETC bridge chain will realize the two-way token transfer between ETC and the Polkadot network, and its mid- to long-term goal is to allow two-way sharing of the state between the ETC chain and the Polkadot, such as sending from the ETC smart contract Related instructions and information to the Polkadot chain.
This means that once the Polkadot network is rapidly popularized and applied, the ecological integration and integration of both parties can be realized through the ETC bridge chain. In fact, we know that the integration of the two parties is not limited to Polkadot’s own ecology, but also includes the DeFi ecology on many of its parachains. At the same time, the two-way transfer state and operation logic actually represent that Polkadot will become the second-tier scalability solution for ETC-based applications.
Summary and outlook
The strong growth momentum of Bitcoin anchor currency indirectly illustrates the market demand for assets across the chain. Similar to the successful logic of the Bitcoin anchor currency, wETC injects ETC into the Ethereum DeFi ecosystem by issuing cross-chain assets on ETH, which is a win-win situation for the evolving DeFi ecosystem or ETC itself.
Whether it is the issuance and application promotion of the cross-chain asset wETC, or the advance layout of the Polkadot ecology, or even ETC’s own support for the development of DeFi projects on its network, it all demonstrates ETC’s determination to explore the DeFi world.
“The realization of these two projects will open up new application potential and development ecology for ETC, allowing ETC to use the network effects of the two major blockchain ecosystems of Ethereum and Polkadot to realize its value on a larger scale. Circulation.” James Wo concluded at the Web3 conference.
