20 ERC-20 tokens will now be joining Tezos DeFi via wraps and will launch in the first quarter of the year as Bender Labs tweeted about their new whitepaper. In today’s tezos news, we are taking a closer look at the announcement.
In the whitepaper by Bender Labs, we can see that the V1 of the Wrap Protocol will bring 20 ERC-20 tokens to Tezos Defi via wraps. The whitepaper stated that the 20 ERC-20 Ethereum assets can be wrapped into FA2 Tezos assets like BUSD, CEL, COMP, CRO, FTT, AAVE, HUSD, LEO, MKR, PAX, SUSHI, LINK, USDC, WBTC, WETH, UNI, HT, OKB. The WARP token of the WRAP protocol will also be wrapped as an FA2. Bender Labs which is a French team that has members residing in the Greater Bordeaux Metropolitan Area was created to “build an open financial system funning on Tezos.”
Bender looks to bring assets from other chains into the Tezos Defi ecosystem and on Ethereum there are about 350,000 ERC-20 tokens so far. When considering that trading on Tezos is on average about 3000 times cheaper than ETH, there could be a huge incentive to look to trade these assets on Tezos decentralized exchanges in order to avoid the skyrocketing fees. In order to create an open financial system that runs on Tezos and enables assets from other chains to be traded, Bender will use wrapping as:
“…a way to transform any blockchain A into a pegged sidechain of a blockchain B. This way, one can use the consensus mechanism and specific infrastructure of blockchain A to use assets or information stored with both A and B.”
Bender will also use an “off-chain Federation” which is otherwise known as Federated Peg that was developed by Blockstream in 2016. A group of oracles gather facts, run their own consensus mechanism, and trigger transactions on both chains which are done through the aid of co-integrated smart contracts that sit on the Ethereum and Tezos blockchains. Bender will start with ETH first and will move to other chains later. As per the website, Bender:
“designed Wrap Protocol as a quick-to-implement, easy to use and understand, and with a reasonably low level of trust decentralized protocol that will allow to quickly and securely bring assets and liquidity on Tezos.”
DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]