Ethereum Classic Labs (ECL) announced the launch of Wrapped ETC (WETC), a token that connects Ethereum Classic (ETC) users to Ethereum. The company stated that WETC uses a bridging mechanism that effectively makes ETC interoperable on Ethereum. ECL made the move to give ETC users access to the large DeFi pool in Ethereum.
The launch of WETC follows the recent launch of the DAI-ETC bridge. This bridge gave ETC users access to the Ethereum-based stablecoin DAI. It also follows the same cross-chain bridging template developed by ChainSafe Systems.
ETC-ETH Bridging Template for WETC
According to ETC Labs, the cross-chain solution uses ChainBridge, a decentralised application developed by ChainSafe Systems. ChainBridge is a smart contract interface across the ETC and ETH blockchains. It mints and burns WETC tokens on the Ethereum blockchain to equal the ETC transferred into or withdrawn from the smart contract.
WETC tokens are compatible with all wallets that use the ERC-20 standard. Like other ERC-20 tokens, WETC works with all Ethereum DeFi-based exchanges, lending platforms, betting platforms and gaming platforms.
Explaining the necessity behind giving ETC users access to Ethereum DeFi protocols, ETC Labs founder and chairman James Wo said:
The realities of a global pandemic and economic crisis are cementing DeFi as an integral piece of the rapidly-expanding digital economy. Especially where access to financial services like trading, savings, lending, and borrowing are inaccessible due to distance or inability to set up a bank account, DeFi will be an increasingly important force for positive change.
ETC on ETH Blockchain – A Growing Phenomenon
Theoretically, Ethereum is a fork of Ethereum Classic following the DAO hack in Mar 2016. This should make the blockchains rivals. However, in October, ETC Labs announced the launch of the DAI-ETC bridge. This bridge enables ETC users to use their tokens on the Ethereum-based MakerDAO protocol. Like WETC, the ETC-DAI Bridge uses the ChainBridge smart contract interface to make the blockchains interoperable.
Some believe that the moves are effectively a concession to Ethereum’s place in the battle for DeFi supremacy. ETC Labs itself admits that there is a need to make the Ethereum ecosystem accessible to ETC. This is because Ethereum currently hosts the vast majority of DeFi protocols. A quote from the company reads:
Decentralized Finance (DeFi) has grown to over half a million users, with over $13 billion USD locked into DeFi protocols. Given the vast majority of DeFi protocols are based on Ethereum, WETC will provide ETC users an easy way to access DeFi on the Ethereum blockchain.
According to the company, efforts are currently underway to get WETC listed on exchanges.