Bender Labs is launching a new protocol, WRAP, that will help bridge Ethereum tokens to the Tezos blockchain.
The protocol will see users continue to enjoy the dynamic Ethereum DeFi market but achieve seamless transactions in the more advanced Tezos network.
Bender Labs has announced the launch of WRAP. This is a new protocol that will allow users to transfer ERC-20 and ERC-721 tokens on the Tezos blockchain. This means the tokens will be ‘wrapped’ – a token on the Ethereum blockchain with a price identical to another token. The emergence of such tokens has helped promote interoperability between different blockchains. And now, through Bender Labs’ WRAP, this will be possible between Ethereum and Tezos.
Introducing WRAP tokens
Bender Labs is working to build the required infrastructure to achieve the standards of the traditional capital markets, but on DeFi. For this, the team is composed of former financial executives, developers and engineers. With WRAP, the company aims to introduce the dynamic DeFi ecosystem on Ethereum to the fast and cheaper transactions on Tezos. In its announcement, the Bender Labs team stated:
Using WRAP, users issue wTokens (wrapped tokens) which are representations of ERC-20 and ERC-721 tokens on the Tezos blockchain. wTokens, with their value pegged to the original tokens, can then be seamlessly used through the Tezos ecosystem. At the centre of WRAP is the $WRAP token, which is both an ERC20 and an FA2 token.
The WRAP token will enable users to use the ERC20 token on the Tezos blockchain wrapped in an FA2 token. The WRAP tokens will be distributed weekly. With a maximum supply of 100 million tokens, weekly distributions decrease exponentially. Bender Labs notes that all 100 million tokens will be distributed after 7 years.
Ethereum blockchain concerns over gas fees and scalability continue to grow. However, Ethereum users no longer have to shift to other blockchains and compromise other aspects such as security. Through WRAP, users can enjoy a proof-of-stake consensus mechanism that is cheaper to transact on. Additionally, they can experience Tezos’ self-upgradable network.
Bender Labs CEO, Hugo Renaudin says,
We’re building Bender: a self-driving bank for an open financial system because we believe that financial markets should be open, transparent, unstoppable and rely mostly on lines of codes rather than intermediaries.
The Tezos blockchain has already adopted the proof-of-stake consensus mechanism that Ethereum intends to upgrade into. Additionally, it has a self-upgradable blockchain that has been successful for a couple of years now. Other companies have also validated the project with the likes of Ubisoft Entertainment joining its ecosystem.
As the DeFi market continues to grow, WRAP could be primed to take advantage of the ever-increasing number of users seeking cheaper and faster Ethereum alternatives.
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