In the fast-paced world of cryptocurrencies, interoperability between different blockchains is a crucial challenge. One solution that has emerged to tackle this problem is the concept of Wrapped Tokens. A prime example of how this technology enables seamless cross-chain interactions is Wrapped Toncoin (WTON), allowing Toncoin holders to utilize their assets on various blockchain networks.
TONCoin is TON’s native cryptocurrency that is used for network operations, transactions, games, or collectibles built on the TON network.
Read more about TONCoin in this article.
Wrapped tokens are a type of cryptocurrency that represent another cryptocurrency or asset on a different blockchain. They are designed to facilitate the interoperability and movement of assets between different blockchain networks. The process of wrapping a token involves “locking” the original native token on its original blockchain and then issuing an equivalent amount of a new token on a different blockchain, which is referred to as the “wrapped” token.
What is Wrapped Toncoin?
Wrapped Toncoin is a form of token that allows the transfer of Toncoin from its native blockchain, the TON blockchain, to other blockchain networks such as Ethereum and BNB Chain. This transfer is facilitated through a process called “mint-and-burn,” where the Toncoin is locked on its native chain while an equivalent amount of Wrapped Toncoin is minted on the target blockchain.
For example:
If you send 10 Toncoin, the TON blockchain will block and remove 10 “native” coins from circulation. Then, BNB Chain will mint 10 equivalent tokens. These Wrapped Toncoins, also known as Toncoin BEP-20 (on BNB Chain) or other equivalents, are fully analogous to native Toncoin and maintain a consistent 1:1 value ratio.
Why do we need Wrapped Tokens?
Simplifying Inter-Blockchain Transactions: Wrapped Toncoin streamlines the interacting process of various blockchains. Users are able to move their Toncoin to other networks and leverage native services and decentralized applications (DApps) seamlessly.
Decentralized Exchange Liquidity Provision: By becoming liquidity providers on popular decentralized exchanges like Uniswap (on Ethereum) and PancakeSwap (on BNB Chain), Toncoin holders can contribute to the liquidity pool and earn rewards.
Higher Wallet Compatibility: Wrapped Toncoin can be stored in widely used crypto wallets like MetaMask, making it more accessible to users in the decentralized finance (DeFi) ecosystem.
Read more about wallets in this article.
What are Cross-Chain Bridges?
Cross-chain bridges are specialized protocols or smart contracts that act as intermediaries between different blockchain networks, facilitating the movement of tokens between them. These bridges enable secure transfers of assets, allowing users to send tokens from one blockchain to another. In the case of Wrapped Toncoin, cross-chain bridges play a central role in the minting and burning process, ensuring the smooth conversion of Toncoin between the TON blockchain and the target blockchains.
Thanks to efficient cross-chain bridges, this innovative wrapped token empowers Toncoin holders to seamlessly transfer and utilize their assets across multiple blockchain networks. Wrapped Toncoin streamlines transactions, boosts liquidity provision on decentralized exchanges, and ensures compatibility with major crypto wallets. Its potential to bridge diverse ecosystems signifies a bold step forward in reshaping how we engage with cryptocurrencies, paving the way for a decentralized and interconnected future.
