New Token Launch Hopes to Bridge Ethereum and Tezos
Wrap Protocol lets users turn ERC-20 tokens from the Ethereum blockchain into FA-2 tokens for the Tezos blockchain.
- 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.
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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
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.
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%).