Wrapped Ether is an ERC-20 token backed 1:1 with Ether. It enables seamless trading with other ERC-20 tokens on decentralized platforms. Instead of wrapping ETH, users trade it via a smart contract for an equivalent amount of wETH, which can later be converted back to ETH. wETH ensures compatibility within the Ethereum ecosystem, allowing for direct transactions on decentralized exchanges that require uniform token standards.
Wrapped Ether was first developed and implemented by a group of Ethereum projects led by 0x labs. This coalition of projects established a canonical ERC20-compliant wrapped ether token in order to create standardization and maximize security across applications. WETH was created to allow users to convert ETH to WETH without using a centralized party and then be able to use those WETH tokens on dApps in the Ethereum ecosystem. The first proposed canonical WETH contract was released in November of 2017. The current deployed WETH contract can be found here.
