What is the difference between Wrapped Bitcoin and Lido Staked Ether coin?

0
77

More and more people are wondering why to invent new types of already existing coins. Is there a secret behind their technologies? Or is it a great investment opportunity?

Let’s discuss it!

What is Lido Staked Ether coin?

Lido Staked Ether (STETH) is an ERC-20 token that provides a stake when staking ETH 2.0. It is issued by the Lido project, which allows you to count on profits in tokens of the second version of the Ether without blocking your own assets and without infrastructure support, for example, through lending. Lido addresses key issues with ETH 2.0 staking, including low liquidity, and low availability. With Lido, users can participate in Ether staking with any amount of funds.

The STETH rate, accordingly, is always tied to the value of ETH, so that after the Lido ETH stake is unlocked, all owners can receive the corresponding amount in new Ether by liquidating STETH.

 

You can always check whether the STETH price chart is 1:1 with the real ETH on letizo.com.

What is Wrapped Bitcoin

Wrapped Bitcoin or WBTC is an ERC-20 format token whose exchange rate is pegged to Bitcoin (BTC) at a ratio of 1:1.

Simply put, WBTC is an analog of Bitcoin on the Ethereum blockchain. Wrapped Bitcoin has the same value as BTC. The Wrapped Bitcoin price chart repeats the movements of Bitcoin.

 

Wrapped Bitcoin is issued by the decentralized organization WBTC DAO. Its partners include almost 60 market participants, including the Kyber and Ren blockchain projects, as well as the BitGo cryptocurrency depository.

 

With the help of “wrapped” Bitcoins, the developers solved the problem of incompatibility between the BTC and Ethereum blockchains. Wrapped technology helps to transfer cryptocurrency to another network by creating its tokenized version.

The bottom line

So it turns out that both assets are a way of earning more than just holding “real” crypto kings. While STETH is for staking, the prerequisite for the emergence of WBTC was the desire of Bitcoin owners to use the capabilities of the Ethereum blockchain. In particular, we are talking about access to earning tools in the decentralized finance (DeFi) market.

 

The fact is that decentralized protocols built on Ethereum support only ETH-based tokens. Bitcoin is not one of them. This means that BTC holders cannot lock coins for the needs of DeFi protocols in order to receive passive income.

 

Consequently, the Wrapped Bitcoin price prediction in 2030 repeats the one of its twin – real BTC.

LEAVE A REPLY

Please enter your comment!
Please enter your name here