Add Learn page on Wrapped Ether (WETH) #8203

emmanuel-awosika · 2022-10-07T16:20:25Z

This page provides an overview of Wrapped Ether (WETH)--what it is, how it works, why it matters, and how it is different from Ether (ETH). This is part content approved for Q3's content strategy epic, targeted at beginner-level users of Ethereum.

Related Issue

#7240

Summary by CodeRabbit

Documentation
- Introduced a comprehensive guide on Wrapped Ether (WETH), including its utility in the Ethereum ecosystem, the process of wrapping and unwrapping ETH, and security considerations.
Bug Fixes
- Enhanced error handling in the date extraction function to return the current date if an error occurs, ensuring reliability in date information.
New Features
- Expanded the list of predefined slugs to include "/wrapped-ether," facilitating easier access to new content.

This page provides an overview of Wrapped Ether (WETH)--what it is, how it works, why it matters, and how it is different from Ether (ETH).

gatsby-cloud · 2022-10-07T16:34:24Z

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jmcook1186 · 2022-11-29T10:38:26Z

src/content/wrapped-ether.md

+
+Locking up ETH before minting new WETH tokens ensures every amount of WETH in circulation is backed by an equal amount of ETH held in reserves. This keeps the values of  WETH and ETH equal, such that you can convert WETH to ETH (and vice-versa) at a 1:1 ratio.
+
+Wrapped Ether (WETH) and other wrapped tokens are similar to [stablecoins](/stablecoins/), as their value is pegged to the value of other assets. But while stablecoins are backed by US dollars held in off-chain reserves, WETH is collateralized by ETH issued on the Ethereum blockchain.


I would delete this section. You've already said that WETH:ETH == 1:1, no need to bring stablecoins into it, especially as stablecoins are not generally backed by offchain USD but a basket of various on and offchain assets that will be complicated to explain properly.

Fixed this.

src/content/wrapped-ether.md

jmcook1186 · 2022-11-29T11:30:43Z

src/content/wrapped-ether.md

+
+**Are WETH and ETH the same price?**
+
+WETH is pegged 1:1 to the price of ETH, so the value of both assets are usually equal at any time. This peg is maintained by ensuring that every unit of WETH is backed by ETH held in reserves. Forces of supply and demand also keep the prices of ETH and WETH relatively equal: 


Suggested change

WETH is pegged 1:1 to the price of ETH, so the value of both assets are usually equal at any time. This peg is maintained by ensuring that every unit of WETH is backed by ETH held in reserves. Forces of supply and demand also keep the prices of ETH and WETH relatively equal:

WETH represents ETH, so the value of both assets are usually equal at any time. Since 1 WETH is immediately redeemable for 1 ETH and every WETH is 100% backed by ETH, any deviation from price equality would be immediately arbitraged away.

...any deviation from price equality would be immediately arbitraged away.

This assumes the average reader is already familiar with arbitrage. Since the page is targeting relatively inexperienced readers, the supply-and-demand argument feels more appropriate. If an advanced reader does land on this section of the page, they'd easily understand we're talking about arbitrage.

jmcook1186 · 2022-11-29T11:30:58Z

src/content/wrapped-ether.md

+
+WETH is pegged 1:1 to the price of ETH, so the value of both assets are usually equal at any time. This peg is maintained by ensuring that every unit of WETH is backed by ETH held in reserves. Forces of supply and demand also keep the prices of ETH and WETH relatively equal: 
+
+- If WETH were cheaper, more people would buy it and convert it to the more expensive ETH at a 1:1 ratio to make profit. This would drive up demand for WETH and increase the price of WETH tokens. 


These supply/demand explanations are unnecessary IMO

Suggested change

- If WETH were cheaper, more people would buy it and convert it to the more expensive ETH at a 1:1 ratio to make profit. This would drive up demand for WETH and increase the price of WETH tokens.

Expanded on the reason I think explaining the peg via supply and demand is better in my previous comment.

jmcook1186 · 2022-11-29T11:31:09Z

src/content/wrapped-ether.md

+WETH is pegged 1:1 to the price of ETH, so the value of both assets are usually equal at any time. This peg is maintained by ensuring that every unit of WETH is backed by ETH held in reserves. Forces of supply and demand also keep the prices of ETH and WETH relatively equal: 
+
+- If WETH were cheaper, more people would buy it and convert it to the more expensive ETH at a 1:1 ratio to make profit. This would drive up demand for WETH and increase the price of WETH tokens. 
+- If WETH is more expensive, more people would buy ETH and convert it to WETH to sell at a profit. As the supply of WETH increases, the value of WETH tokens would drop—keeping the peg relatively stable. 


Suggested change

- If WETH is more expensive, more people would buy ETH and convert it to WETH to sell at a profit. As the supply of WETH increases, the value of WETH tokens would drop—keeping the peg relatively stable.

src/content/wrapped-ether.md

jmcook1186

requested some small changes, mostly simplifications. I think it is important for this page to be as clear and easy to understand as possible, especially since there have been "jokes" going around about WETH depegging.

Co-authored-by: Joseph Cook <[email protected]>

emmanuel-awosika · 2022-12-21T06:54:02Z

requested some small changes, mostly simplifications. I think it is important for this page to be as clear and easy to understand as possible, especially since there have been "jokes" going around about WETH depegging.

Thanks for the feedback. I found an article on the formal verification of the WETH contract and added it (that should provide some evidence of its security). On a sidenote, do you think we should an FAQ item explaining the difference between WETH on Ethereum and WETH on other blockchains (e.g., Solana WETH) to clear up potential confusion? Thinking that might help users understand WETH on Ethereum isn't susceptible to some of the risks of bridged assets (e.g., what happened with the Wormhole hack).

wackerow · 2024-03-22T21:53:08Z

Just merged in the work from #12481 to consolidate these changes into one PR with the git history maintained. This is ready for final content review.

wackerow

Looks good! Thanks @corwintines and @emmanuel-awosika! I think this is ready to pull in at this point 🎉

wackerow · 2024-03-26T15:45:28Z

public/content/wrapped-eth/index.md

+<ExpandableCard title="What are the WETH contracts on other networks?" eventCategory="/wrapped-eth" eventName="clicked What are the WETH contracts on other networks?">
+- [Ethereum Mainnet](https://etherscan.io/token/0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2)
+- [Arbitrum](https://arbiscan.io/token/0x82af49447d8a07e3bd95bd0d56f35241523fbab1)
+- [Optimism](https://optimistic.etherscan.io/token/0x4200000000000000000000000000000000000006)
+</ExpandableCard>


Noting we could potentially use https://tkn.xyz/weth in the future

src/intl/en/page-eth.json

wackerow · 2024-03-26T18:12:17Z

@all-contributors please add @emmanuel-awosika for content and doc

allcontributors · 2024-03-26T18:12:27Z

@wackerow

I've put up a pull request to add @emmanuel-awosika! 🎉

Add Learn page on Wrapped Ether (WETH)

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This page provides an overview of Wrapped Ether (WETH)--what it is, how it works, why it matters, and how it is different from Ether (ETH).

emmanuel-awosika requested review from samajammin, wackerow, corwintines, pettinarip, minimalsm and jmcook1186 as code owners October 7, 2022 16:20

github-actions bot added content 🖋️ This involves copy additions or edits review needed 👀 labels Oct 7, 2022

emmanuel-awosika added 2 commits October 12, 2022 14:01

Update wrapped-ether.md

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Update wrapped-ether.md

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