# WETH (Wrapped ETH) > WETH (Wrapped Ether) is an ERC-20 token fully backed by ETH, enabling its use in decentralized applications and exchanges on the Ethereum network. - Canonical URL: https://iq.wiki/wiki/weth-wrapped-eth - Categories: Cryptoassets - Created: 2023-08-19T15:08:59.252Z - Last updated: 2025-05-28T12:16:47.881Z - Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki) --- **WETH**, or Wrapped Ethereum, is an [ERC-20](https://iq.wiki/wiki/erc-20) token that [ETH](https://iq.wiki/wiki/ethereum), the native [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) of the [Ethereum](https://iq.wiki/wiki/ethereum) blockchain, fully collateralizes. It serves as a tokenized variant of ETH and is intended for use in [dApps](https://iq.wiki/wiki/decentralized-application) that need an ERC-20 token. [\[1\]](#cite-id-0x0n0rrlffrb) # Overview Wrapped Ethereum (WETH) is a tokenized [Ether (ETH)](https://iq.wiki/wiki/ether-eth) form that complies with the [ERC-20](https://iq.wiki/wiki/erc-20) standard on the [Ethereum](https://iq.wiki/wiki/ethereum) [blockchain](https://iq.wiki/wiki/blockchain). Wrapped tokens like WETH represent their original [cryptocurrencies](https://iq.wiki/wiki/cryptocurrency) at a 1:1 value and can be converted back into the original asset at any time. This concept is similar to [stablecoins](https://iq.wiki/wiki/stablecoin), which are [pegged](https://iq.wiki/wiki/currency-peg) to [fiat](https://iq.wiki/wiki/fiat-money) currencies and redeemable on demand. The primary purpose of wrapped tokens is to enable interoperability across different [blockchains](https://iq.wiki/wiki/blockchain), which otherwise have limited compatibility. Native coins from one [blockchain](https://iq.wiki/wiki/blockchain) cannot be used directly on another. Wrapping a coin applies the receiving [blockchain’s](https://iq.wiki/wiki/blockchain) token standard to a tokenized version of the original asset, allowing it to function within that ecosystem. [Ethereum’s](https://iq.wiki/wiki/ethereum) native [cryptocurrency](https://iq.wiki/wiki/cryptocurrency), [ETH](https://iq.wiki/wiki/ether-eth), does not follow the [ERC-20](https://iq.wiki/wiki/erc-20) token standard that most fungible tokens on [Ethereum](https://iq.wiki/wiki/ethereum) adhere to, which complicates its use in [decentralized applications (dApps)](https://iq.wiki/wiki/decentralized-application). WETH was introduced to address this by providing an [ERC-20](https://iq.wiki/wiki/erc-20) compatible version of [ETH](https://iq.wiki/wiki/ether-eth), enhancing interoperability and usability within [dApps](https://iq.wiki/wiki/decentralized-application). Wrapped tokens require custodians, which can be [smart contracts](https://iq.wiki/wiki/smart-contract) or other mechanisms, to hold the original asset as collateral. When [ETH](https://iq.wiki/wiki/ether-eth) is sent to such a custodian, an equivalent amount of WETH is [minted](https://iq.wiki/wiki/minting). This maintains the same value while enabling WETH to interact seamlessly with other [ERC-20](https://iq.wiki/wiki/erc-20) tokens in [decentralized finance (DeFi)](https://iq.wiki/wiki/defi) applications. On [Ethereum](https://iq.wiki/wiki/ethereum), WETH is commonly used in [decentralized exchanges](https://iq.wiki/wiki/decentralized-exchange) and other [dApps](https://iq.wiki/wiki/decentralized-application) where only [ERC-20](https://iq.wiki/wiki/erc-20) tokens are accepted. Other [blockchains](https://iq.wiki/wiki/blockchain) may have their versions of wrapped [Ether](https://iq.wiki/wiki/ether-eth) to facilitate similar functionality. [\[7\]](#cite-id-GYVdvMLm2J) [\[8\]](#cite-id-fLkQy5tuwN) ## History The [Ethereum](https://iq.wiki/wiki/ethereum) [blockchain](https://iq.wiki/wiki/blockchain) and [ETH](https://iq.wiki/wiki/ether-eth) were introduced in July 2015, before the development of the [ERC-20](https://iq.wiki/wiki/erc-20) standard. [ERC-20](https://iq.wiki/wiki/erc-20), which establishes a uniform token standard, was initially introduced in November 2015. Consequently, while tokens employed by [Ethereum's](https://iq.wiki/wiki/ethereum) [decentralized applications](https://iq.wiki/wiki/decentralized-application) adhered to the [ERC-20](https://iq.wiki/wiki/erc-20) standard, the [Ether](https://iq.wiki/wiki/ether-eth) [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) itself did not follow this standard. [\[6\]](#cite-id-fh7xsxb9ojp) In 2017, the [0x](https://iq.wiki/wiki/0x) project team introduced WETH to address the interoperability challenges between various [decentralized exchanges](https://iq.wiki/wiki/decentralized-exchange) and [dApps](https://iq.wiki/wiki/decentralized-application) on the [Ethereum](https://iq.wiki/wiki/ethereum) network. During that period, distinct token standards among [DEXs](https://iq.wiki/wiki/decentralized-exchange) hindered asset movement across platforms. WETH aimed to establish a standardized, interoperable system by tokenizing [ETH](https://iq.wiki/wiki/ether-eth) for seamless trading and integration with other [dApps](https://iq.wiki/wiki/decentralized-application) and [DEXs](https://iq.wiki/wiki/decentralized-exchange). The initial WETH contract went live on the [Ethereum](https://iq.wiki/wiki/ethereum) [mainnet](https://iq.wiki/wiki/mainnet) in January 2018. [\[2\]](#cite-id-gu5px3h3enj) # Supply Mechanism A predetermined limit does not bind WETH's supply but adapts according to demand dynamics. Upon an individual's conversion of [Ether](https://iq.wiki/wiki/ether-eth) to WETH, the [smart contract](https://iq.wiki/wiki/smart-contract) generates newly minted WETH tokens. Conversely, when WETH is exchanged for [Ether](https://iq.wiki/wiki/ether-eth), an equivalent quantity of WETH is retired. [\[6\]](#cite-id-fh7xsxb9ojp) Despite its 1:1 [pegging](https://iq.wiki/wiki/currency-peg) to [Ether](https://iq.wiki/wiki/ether-eth), marginal fluctuations (typically below 1%) may arise between WETH and [Ether](https://iq.wiki/wiki/ether-eth), influenced by variables such as Ethereum's [transaction fees](https://iq.wiki/wiki/transaction-fee) and trading activities on [centralized](https://iq.wiki/wiki/cex-centralized-exchange) and [decentralized exchanges](https://iq.wiki/wiki/decentralized-exchange). [\[6\]](#cite-id-fh7xsxb9ojp) In theory, a scenario may emerge wherein WETH demand wanes completely, ceasing token circulation. Conversely, heightened market interest in WETH leads to an expansion in its supply. This contrasts with non-pegged [cryptocurrencies](https://iq.wiki/wiki/cryptocurrency), where supply protocols frequently incorporate restrictions or scheduled issuance patterns. [\[6\]](#cite-id-fh7xsxb9ojp)