New Token Launch Hopes to Bridge Ethereum and Tezos

Vishal Chawla

Apr. 26, 2021

Wrap Protocol lets users turn ERC-20 tokens from the Ethereum blockchain into FA-2 tokens for the Tezos blockchain.

New Token Launch Hopes to Bridge Ethereum and Tezos

Shutterstock cover by Hien Phung Thu

Key Takeaways

The Wrap Protocol allows users to transfer their Ethereum tokens to the Tezos blockchain in a decentralized manner.
According to Bender Labs, the Wrap protocol converts ERC-20 tokens into FA2–Tezos' unified multi-asset token standard.
After enticing token rewards, Wrap can be beneficial for Ethereum users who want to take advantage of the Tezos ecosystem and vice versa.

Bender Labs is launching a new token and protocol to incentivize the use of a new bridge between Ethereum and Tezos.

Wrap Protocol Bridges Ethereum, Tezos

Wrap Protocol allows users to transfer their Ethereum tokens to the Tezos blockchain.

Using the bridge, users can generate 1:1 representations of Ethereum tokens on the Tezos blockchain. Wrapping allows value transfer between two blockchains with incompatible token formats. One popular example is Wrapped Bitcoin (WBTC), which is a representation of Bitcoin on Ethereum.

According to Bender Labs, the Wrap Protocol converts ERC-20 tokens into FA-2–Tezos’ unified multi-asset token standard.

In this case, a user would lock their ERC-20 token into the Wrap Protocol’s contract and generate an FA-2 token on Tezos with a 1:1 representation. Beyond creating a convenient bridge between the two networks, users can also earn the native WRAP token for participating.

There is a total supply of 100 million tokens distributed every week among Signer Quorum (50%), protocol users (40%), and the development pool (10%). The Quorum is a federation of five entities that secure the wrapping mechanism. These entities include Bender Labs, Bake N Rolls, Blockscale, MadFish, and Baking Bad.

Users can earn WRAP simply by wrapping various ERC-20 tokens using the protocol. Some wraps are more lucrative than others.

Distribution of WRAP Tokens. Source: Bender Labs

The token is similar to various blue-chip DeFi tokens, doubling as a governance token and accruing fees for holders. Each time the network is used, 0.15% are charged and distributed among holders (0.1%), signers (0.04%), and the development pool (0.01%).

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