Wrapped tokens are formed when you deposit ether to the contract address of a token in exchange for the equivalent amount in an ERC20 standard token. These tokens are created by combining a non-fungible Ethereum smart contract with a fungible ERC-20 compliant “wrapper.” This new-minted token can then be stored, sent, and received like any other normal ERC-20 token.
Wrapped tokens enable new and innovative use cases for crypto asset owners. For example, imagine a tradable share of stock that can be exchanged on the EtherDelta decentralized exchange through wrapped ETH instead of only an ERC20 standard compliant token like Tether (USDT). The possibilities of what can be done with wrapped tokens are endless!
How to Create a Wrapped Token
There are two ways that you can create a wrapped token. The first is to use an online wrapper generator. This is the easiest way to create a new wrapped token. The second way is to use the command-line tool “truffle.” This will allow you to create a more custom-wrapped token. Generating a wrapped token from an online generator is simple and only takes a few minutes.
Are Wrapped Tokens Safe?
The safest way to store your wrapped ERC20 tokens is to transfer them into an EtherDelta smart contract. When you deposit your wrapped ETH, it will be deposited into a non-fungible vault token on the blockchain. This vault holds the only reference to the funds that are deposited in this wrapper contract and can mint or burn new wrapped tokens as needed.
This is an important security feature because it prevents anyone from being able to spend your tokens without your permission. The EtherDelta smart contract also has a function that allows you to recover your funds if you ever lose your private key.
Can I Trade with Wrapped Tokens?
Yes, EtherDelta has already implemented support for trading wrapped tokens as well as any other ERC20 token. In order to deposit a wrapped ETH token into your EtherDelta wallet, you will need to use the wrapper contract address as the destination of your transfer. Quantum AI allows users to trade using wrapped tokens for the best deals.
Wrapped Tokens vs. Standard ERC-20 Tokens
One benefit that a wrapped token has over a standard ERC-20 token is that it can be used in decentralized exchanges like EtherDelta. This is because a wrapped token is not just an ERC-20 token but also includes a non-fungible Ethereum smart contract.
This extra layer of security makes it possible for traders to exchange wrapped tokens in a trustless environment. Standard ERC-20 tokens can also be traded on decentralized exchanges, but they are not as safe because they are not linked to a non-fungible Ethereum smart contract.
Crypto wrapped tokens are created when you deposit ether into a contract address in exchange for the equivalent amount of a standard ERC-20 token. Wrapped tokens represent a new and innovative way to store your ERC-20 tokens on the blockchain.
Many use cases can be realized through wrapped tokens, but it is important to remember that they are not 100% trustless. To be sure that you are safe when dealing with these smart contracts, always use EtherDelta as your wallet of choice.
Conclusion
Wrapped tokens are a new and innovative way to store and use your Ethereum-based tokens. They make it possible to trade all types of ERC-20 tokens on decentralized exchanges like EtherDelta by adding an extra layer of security to the smart contract that stores your tokens.
Wrapped tokens will enhance and improve your Ethereum trading experience, but it is critical that you only use EtherDelta as your wallet, or else you may be putting your tokens at risk.
