Convert WXTZ to JPY

Wrapped XTZ (WXTZ) is a standardised ERC-20 token that represents Tezos (XTZ) on the Ethereum and Etherlink blockchains, enabling the native Tezos asset to participate in the broader decentralised finance (DeFi) ecosystem.

Key takeaways

• WXTZ is a wrapped version of the Tezos (XTZ) token, allowing it to be used on Ethereum-compatible networks like Etherlink.
• It bridges the Tezos blockchain with the expansive Ethereum DeFi landscape, unlocking liquidity and new use cases for XTZ holders.
• The token is fully backed 1:1 by XTZ held in secure, audited custodial contracts, ensuring its value is always redeemable.
• Users can mint WXTZ by depositing XTZ into a designated bridge and burn WXTZ to retrieve the original XTZ.
• It serves as a crucial interoperability tool, letting Tezos community members access popular DeFi protocols, decentralised exchanges, and lending platforms on other chains.

What is Wrapped XTZ? Key Specifications & Tokenomics

Wrapped XTZ (WXTZ) is an ERC-20 token that acts as a cross-chain bridge for Tezos' native cryptocurrency, XTZ, allowing it to function within Ethereum-based decentralised applications.

Who created Wrapped XTZ (WXTZ)?

WXTZ wasn't created by a single individual but rather emerged as a community-driven and infrastructure-led solution to a common problem in the blockchain space: interoperability. The need to bring Tezos' native XTZ into the vast Ethereum Virtual Machine (EVM) ecosystem led to the development of wrapping services. These are typically operated by reputable bridging protocols or decentralised organisations that manage the custodial smart contracts. For instance, the version of WXTZ on Etherlink—Tezos' official EVM-compatible rollup—is a canonical bridge asset supported by the Tezos ecosystem itself. This ensures a high degree of security and trust, as the bridging mechanism is integrated into the core infrastructure. The development and maintenance are often overseen by teams specialising in cross-chain technology, with audits conducted on the smart contracts that hold the backing XTZ reserves.

How does Wrapped XTZ (WXTZ) work?

WXTZ operates on a straightforward custodial bridge model, creating a transparent link between the Tezos and EVM-compatible networks. The process works as follows:

• Minting (Wrapping): A user sends native XTZ from their Tezos wallet to a secure, audited smart contract on the Tezos blockchain. Once the deposit is verified, an equivalent amount of WXTZ tokens is minted on the destination chain (like Etherlink or Ethereum) and sent to the user's address on that network.
• Backing Reserves: The original XTZ is held in custody within the bridge's smart contract, ensuring every WXTZ token in circulation is fully backed 1:1. These reserves are publicly verifiable on-chain.
• Usage on EVM Chains: The user can now use their WXTZ on any decentralised application built for the EVM, such as swapping it on a DEX, providing liquidity, or using it as collateral in lending protocols.
• Burning (Unwrapping): To retrieve the original XTZ, the user sends their WXTZ back to the bridge contract on the EVM chain. These WXTZ tokens are then burned (destroyed), and the locked XTZ is released from the Tezos-side contract and returned to the user's Tezos wallet.

What makes Wrapped XTZ (WXTZ) unique and valuable?

The unique value of WXTZ lies in its role as a seamless interoperability layer, specifically tailored for the Tezos ecosystem. Unlike generic cross-chain bridges that may support dozens of assets, WXTZ is the canonical representation of XTZ on EVM chains, particularly on Tezos' own Etherlink rollup. This official status provides enhanced security and trust, as it is built and maintained with the endorsement of the core Tezos community. Its primary value propositions are:

• Unlocking Liquidity: It liberates the value stored in XTZ, allowing it to flow into the multi-billion dollar DeFi markets on Ethereum and Etherlink, which offer more trading pairs, higher yields, and innovative financial products.
• Ecosystem Expansion: For the Tezos ecosystem, WXTZ acts as a two-way gateway. It not only lets XTZ holders explore external DeFi but also attracts users and capital from other chains to interact with Tezos-native applications via Etherlink.
• Simplicity and Security: The 1:1 backing model is simple for users to understand, and the use of audited, time-tested bridge contracts mitigates the risks associated with some complex cross-chain protocols.

What is Wrapped XTZ (WXTZ) used for?

WXTZ transforms the utility of XTZ by enabling it to function within the EVM ecosystem. Its main use cases include:

• DeFi Participation: Users can supply WXTZ as liquidity on automated market makers (AMMs) like Uniswap forks on Etherlink to earn trading fees, or use it as collateral to borrow other assets on lending platforms such as Compound or Aave clones.
• Decentralised Trading: It can be traded directly against hundreds of other ERC-20 tokens on DEXs, providing deep liquidity and new arbitrage opportunities for XTZ.
• Yield Farming: Many DeFi protocols offer yield farming incentives. Users can stake WXTZ in liquidity pools or vaults to earn additional token rewards.
• Collateral for Derivatives: On advanced DeFi platforms, WXTZ can be used as margin collateral for trading perpetual swaps or other synthetic assets, allowing for leveraged positions on the price of Tezos.

How Is the Wrapped XTZ (WXTZ) Ecosystem Developing?

The WXTZ ecosystem is intrinsically linked to the growth of Tezos' interoperability layer, Etherlink, and the broader EVM DeFi space. Development is focused on enhancing integration and utility:

• Etherlink Integration: As the official EVM rollup for Tezos, Etherlink is becoming the primary home for WXTZ. Its low fees and fast transactions make using WXTZ for DeFi activities more practical and cost-effective than on Ethereum mainnet.
• Protocol Integrations: Developers are continuously integrating WXTZ into new and existing DeFi applications on Etherlink, expanding the range of services available to holders, from lending and borrowing to NFT marketplaces that accept WXTZ.
• Bridge Security and Efficiency: Ongoing efforts are dedicated to improving the security audits of the bridging contracts and optimising the mint/burn process to make it faster and cheaper for users.
• Multi-Chain Presence: While Etherlink is key, WXTZ's presence on other EVM-compatible chains and Layer 2 networks continues to grow, further dispersing Tezos liquidity across the Web3 landscape.

How to mine Wrapped XTZ (WXTZ)?

WXTZ cannot be mined through traditional proof-of-work or proof-of-stake mechanisms. It is a minted asset, not a mined one. The only way to create new WXTZ tokens is through the official bridging process:

1. A user must deposit native XTZ into the designated bridge smart contract on the Tezos blockchain.
2. Upon confirmation, the bridge protocol mints an equivalent amount of WXTZ on the connected EVM chain (like Etherlink). This process ensures the token supply is always directly tied to the amount of XTZ held in custody. Therefore, "mining" WXTZ is effectively the act of providing liquidity to the bridge by locking up XTZ.

How to keep your WXTZ Coin safe?

Securing your WXTZ involves safeguarding both the token on the EVM chain and your ability to access the bridged XTZ. Key practices include:

• Use a Secure EVM Wallet: Store your WXTZ in a reputable non-custodial wallet like MetaMask or Rabby that supports the network it's on (e.g., Etherlink). Protect your seed phrase offline and never share it.
• Verify Contract Addresses: Always double-check the official WXTZ token contract address when interacting with it. Scammers often create fake tokens with similar names.
• Secure the Bridge Access: Ensure you control the private keys for both your Tezos wallet (holding XTZ) and your EVM wallet (holding WXTZ). Losing access to either can trap your assets.
• Beware of Phishing: Only use official bridge interfaces (like those linked from the Tezos or Etherlink foundation websites) to wrap or unwrap your tokens. Avoid clicking on links from unsolicited messages.

How to buy WXTZ Coin?

WXTZ is a specialised cryptocurrency that bridges Tezos to EVM networks. For a seamless trading experience with high liquidity, it is recommended to use a major platform like the BTCC exchange.

1. Register a BTCC Account: Sign up using your email or mobile number and complete the KYC verification to unlock more features and benefits of the platform.
2. Deposit Funds: Deposit fiat currency (via bank transfer, card, or third-party payment) or transfer USDT from an external wallet into your BTCC account. You can follow this guide.
3. Start Trading: Go to the trading page and search for the spot trading pair WXTZ/USDT or the perpetual contract WXTZ/USDT.
4. Place an Order: Enter the amount of WXTZ you wish to purchase and submit the order. For contract trading, you can also choose to go short (sell) and adjust the leverage multiplier according to your strategy and risk tolerance.
5. Confirm Your Purchase: For spot purchases, check your personal account to see if the coins have arrived. For contract trades, check the trading page to see if your order was filled successfully.