Thread by @laishawadhwa

Gm Gm Web3 fam!

Its Day 23 of #web3glossary

W: WWW,Wrapped token,wei
Do you remember the first time you heard about Blockchain? Maybe you took it as a new technology that would change everything. Maybe you just wondered if you should start investing in crypto.
Maybe...
👀👇

..you were just getting your head around the concept of a decentralized web
The truth is web3 is indeed the decentralized internet of the future🚀

#web3glossary was started as a series of twitter threads to help people understand this space better and clear the air around...

.. the terms & jargons we hear around. We are almost at the end of the series and I would like to hear from you what value you gained from it and what more would you like to see😃
Until then, let’s get to today’s thread

Let’s go back to where it all started- the world wide web👇

Web1 was about communication, Web2 is about interaction, & Web3 is all about ownership.
As Web 3.0 evolves, several game-changing concepts have emerged and gained popularity in recent times like DAOs, NFT and DeFi.

Decentralised finance deals with Dapps, wallets, protocols on money movement and other standards around the cryptocurrencies and tokens.
The DeFi space has been growing exponentially however, DeFi needs cross-chain liquidity for global adoption
Wrapped tokens offer a solution.

Wrapped tokens allow users to transact with cryptocurrencies via blockchains or token standards outside their original design scope. They’re usually created by holding the original asset in a digital vault, then issuing a wrapped token representing the vault assets. They allow..

..for greater interoperability between previously non-compatible digital assets across chains
Almost every major blockchain has a wrapped version of its native cryptocurrency
Eg Wrapped ethereum (WETH)
WETH refers to the ERC-20 compatible version of ether.

WETH can be created by sending ether to a smart contract where the ether is placed on hold, in turn receiving the WETH ERC-20 token at a 1:1 ratio. This WETH can then be sent back into the same smart contract to be unwrapped /redeemed back for the original ether at a 1:1 ratio

But why do we even need wrapped tokens?🤔
ETH, the native cryptocurrency of Ethereum was created before the ERC-20 standard was implemented. Hence ether itself is not ERC-20 compatible and cannot be exchanged directly for other ERC-20 tokens in a decentralized manner without..

..the mediation of a trusted third party. So, it solves for low interoperability of blockchains- native coins of one chain cannot be used on another chain. And thet do so by tokenizing native coins & applying the blockchain’s token standard to the tokenized version of the..

..original cryptocurrency

How does it work?
For instance, with WETH, you could go to any DEX like @Uniswap and swap your ETH for WETH. The original ETHis converted to WETH, but the value stays the same, similar to how dollar-pegged stablecoins work.

Technically,a custodian (smart contract, multi sign wallets or a merchant) holds your Ether and give you WETH in return

Checkout this concise infographic by @Cointelegraph

Moving on, fiat currency is divisible only into a finite number of parts. 1 indian rupee is only divisible into 100 parts, and a paisa is the atomic unit of the Indian currency. But digital cryptocurrencies are divisible into much, much smaller units.
That’s where wei comes in

Wei is the smallest denomination of Ether
1 ETH = 1,000,000,000,000,000,000 wei (10^18)
Many of ya’ll wont know this 👀👀
Wei was named after Wei Dai, a cryptography activist who is known for supporting the widespread use of strong cryptography and privacy-oriented technologies

That’s a wrap for Day 23!
I’ll be sharing info on the new vocabulary of the web everyday

It’s like a free crash course on the terms and methodolgies in Web3

Follow me @laishawadhwa for more such web3 gyaan
RT the first tweet to share with more folks
tinyurl.com/twteb