WETH Asset

Definition ∞ WETH asset, or Wrapped Ether, is an ERC-20 compatible token that represents Ether (ETH) on the Ethereum blockchain. Since native Ether does not conform to the ERC-20 standard, WETH was created to allow ETH to be used within decentralized applications that require ERC-20 tokens. Users can convert ETH to WETH and vice versa at a 1:1 ratio. This enables Ether to interact seamlessly with a wider array of smart contracts and decentralized finance protocols.
Context ∞ The WETH asset is a fundamental component of the Ethereum decentralized finance ecosystem, often mentioned in news concerning liquidity pools, lending platforms, and decentralized exchanges. Its existence facilitates interoperability between native Ether and the vast landscape of ERC-20 tokens and applications. The process of wrapping and unwrapping Ether is a routine operation for many DeFi users. Understanding WETH is essential for navigating the complexities of the Ethereum network and its various financial protocols.