New Token Launch Hopes to Bridge Ethereum and Tezos

Key Takeaways

  • 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.

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

Wrap Protocol allows users to transfer their Ethereum tokens to the Tezos blockchain.

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%).

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