Native ETH Trading

Definition ∞ Native ETH trading refers to direct transactions involving Ether (ETH) on the Ethereum blockchain without requiring Wrapped Ether (WETH) or other tokenized forms. Traditionally, many decentralized finance (DeFi) applications and smart contracts on Ethereum operate with ERC-20 tokens, necessitating ETH to be wrapped into WETH to conform to this standard. Native ETH trading removes this wrapping step, allowing for more direct and potentially gas-efficient interactions with smart contracts. This simplifies user experience and streamlines operations for protocols that can directly handle the base currency of the Ethereum network.
Context ∞ The ability to trade native ETH directly is a focus of ongoing development in the Ethereum ecosystem, particularly with improvements to smart contract standards and virtual machine capabilities. This development aims to reduce friction and transaction costs for users interacting with decentralized applications. Discussions involve the technical challenges of supporting native ETH in existing ERC-20-centric infrastructure and the benefits of a more seamless user experience for all participants.