Ethereum Classic wants to play in the decentralized finance (DeFi) space of the blockchain from which it contentiously split in 2016.
Announced Wednesday, Ethereum Classic Labs, the ETC blockchain’s biggest supporter, released Wrapped ETC (WETC) – an ERC-20 token that lets ETC holders participate in Ethereum-based DeFi services like trading, lending and borrowing.
“We wanted to make sure ETC could go to a different ecosystem and use different applications on top of that ecosystem,” said James Wo, founder and chairman 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 like bitcoin and issuing an equivalent representation on another blockchain such as Ethereum. Wrapped Bitcoin (WBTC), for instance, is an ERC-20 token that’s backed on a 1:1 basis with bitcoin held in reserve by qualified custodian BitGo Trust. More recently, Zcash announced a wrapped, DeFi-ready version of the privacy coin.
Wo of ETC Labs pointed out that WBTC tokens are backed and guaranteed by BitGo, a centralized entity. “What we have done here is use a smart contract so people can easily exchange ETC for WETC using a smart contract which is totally decentralized,” he said.