Wrapped Tokens and Synthetix tokens

The “W” tokens

Over the past year significant development has happened in the smart contract space, where native tokens from other blockchains have seen a shift to a wrapper based economy. Such a shift is possible because ethereum’s smart contract architecture makes it possible to wrap anything into a contract and write it to the blockchain. As of date, the total number of Wrapped Bitcoin WBTC is approximately 5% of the total market supply available for Bitcoin. WBTC – an ethereum smart contract wrapped version of Bitcoin provides the ability to trade (i.e., buy and sell Bitcoin) on market maker platforms such as sushiswap or uniswap, and on peer-to-peer smart contract exchanges such as AAVE, ZRX, etc. Wrapping native tokens of other blockchains and facilitating transactions in them, make for a significant market share and provides flexibility to such markets.

The “s” tokens

Right behind the “W” revolution is a host protocol for derivatives called Synthetix network, which creates this ethereum laced synthetic token and facilitates Derivatives trading. While wrapping is a “first step” at creating an asset class around non-native tokens for the ethereum blockchain, the Synthetix network enables users to create futures, options, swaps and other kinds of assets based on values of other tokens. This market is just getting started – and is based off the synth token which provides network validation and other services. In the “sBTC” is a synthetix network version of Bitcoin. Similarly the synthetix network intends to create a marketplace for real world assets like AAPL or TSLA which are real stocks sold on NYSE. Creating sAAPL or sTSLA will actually enable these tokens to be traded on exchanges and on exchange protocols such as balancer or uniswap and will provide full liquidity to the owners of these assets.