Ethereum Classic wants to return to being part of the blockchain space from which it controversially split in 2016.
Wrapped ETC
According to an announcement this week, Ethereum Classic Labs, the biggest supporter of the ETC blockchain, has released the Wrapped ETC (WETC), an ERC-20 token that allows ETC holders to participate in Ethereum-based DeFi services.
Wrapping is the act of taking an asset from a blockchain, such as bitcoin for example, and issuing an equivalent representation on another blockchain, such as Ethereum (discover the quotation in real time). Wrapped Bitcoin (WBTC), for example, is an ERC-20 token backed on a 1: 1 basis with bitcoin held in reserve by the qualified custodian BitGo Trust.
“We wanted to make sure ETC could transition to a different ecosystem,” said James Wo, founder and president of ETC Labs. "I expect at least 10% of ETC holders will want to participate and use WETC."
Wo from ETC Labs pointed out that WBTC tokens are supported and guaranteed by BitGo, a centralized entity. WETC can be transferred or stored in any ERC-20 compatible wallet or storage mechanism, Wo said.
ChainBridge, a decentralized application that interfaces with both the Ethereum Classic blockchain and the Ethereum mainnet, allows the transfer of ETC tokens to the Ethereum mainnet via the bridge.
Then a specified amount of ETC is locked into a smart contract and a corresponding amount of WETC is minted on Ethereum. The release of WETC follows the launch of a DAI-ETC bridge, Wo said, which allows ETC users to gain access to the dai of MakerDAO, a popular stablecoin in DeFi.
New beginnings
Ethereum Classic has a particular history, starting with its creation in July 2016 from the Ethereum fork that followed the infamous DAO hack. ETC, which is trading at around $ 5 today, hit an all-time high of $ 47 in December 2017, thanks in large part to the enthusiastic support of cryptocurrency investor Barry Silbert, CEO of Digital Currency Group.
To put it in context, Ethereum's native asset, ether (ETH), is now trading at nearly $ 500. ETC's blockchain was subjected to a series of 51% attacks in August. Wo agreed that the emergence of WETC will help rebuild ETC's reputation.
“Right now the ETC network is very secure, so you can trust them,” he said. "We are also building applications directly on the ETC network, as well as using WETC to go beyond Ethereum."
Either way, Wo sees a bright future as ETC sticks to proof-of-work (PoW) mining while Ethereum is embarking on the difficult leap to proof-of-stake (PoS). "Not everyone trusts PoS," Wo said. "So I think part of the ecosystem will likely stick to ETC or other PoW versions of a blockchain capable of running smart contracts."
