What is Wrapped ETH (WETH)?
Wrapped ETH (WETH) is an ERC-20 token that represents native Ether (ETH) on a strict 1:1 basis. One WETH always equals one ETH. It exists because native ETH and the ERC-20 token standard were designed at different times and are not natively compatible: ETH is the base currency of the Ethereum network, while ERC-20 is a later smart-contract standard that most DeFi protocols were built around. Wrapping ETH into WETH gives it a uniform ERC-20 interface so it can be deposited into liquidity pools, used as collateral, approved for spending, and composed across protocols just like any other token.
WETH is arguably the single most important building block in DeFi. Almost every swap on a DEX and almost every lending position involves WETH under the hood, usually invisibly — most wallets and front-ends wrap and unwrap automatically. For the general concept of wrapping any asset, see Wrapped Token.
How WETH Works / Technical Details
The Wrapping Process
WETH is issued by a simple smart contract. Wrapping is fully trustless — no custodian is involved:
- You send native ETH to the WETH contract
- The contract locks that ETH
- The contract mints an equal amount of WETH to your address
- You now hold WETH, an ERC-20 token
Unwrapping reverses this: send WETH to the contract, it burns the WETH and returns the locked ETH. Both directions are atomic and cost only gas.
Why Native ETH Isn’t ERC-20
The ERC-20 standard defines functions like transfer, approve, allowance, and balanceOf. Native ETH transfers happen at the protocol level (the value field of a transaction), not through a contract, so ETH does not expose these functions. This matters because DeFi smart contracts are written to handle arbitrary ERC-20 tokens generically — they call token.transferFrom(...). To accept native ETH, a contract has to add special-case logic (msg.value, payable functions, refund patterns), which is error-prone. WETH removes that special-casing by giving ETH a standard token interface.
A Real Swap, Under the Hood
When you swap ETH for USDC on Uniswap:
- The router takes your ETH
- It wraps it into WETH automatically
- The WETH is sent into the liquidity pool
- USDC comes back to you
You usually never see the WETH — but without it, the pool’s generic ERC-20 logic could not handle your ETH.
Notable Variants and Use Cases
WETH vs stETH vs wstETH
| Token | Represents | Backing | Balance Behavior |
|---|---|---|---|
| WETH | Native ETH | ETH locked in the WETH contract | Fixed 1:1 |
| stETH | Staked ETH + rewards | Lido staking | Rebases daily (balance grows) |
| wstETH | stETH, non-rebasing | Lido staking | Fixed balance, rising exchange rate |
WETH is purely an interface wrapper with no yield. stETH and wstETH are yield-bearing and represent staked positions — they are different instruments, not interchangeable with WETH.
Canonical Addresses
The WETH contract is deployed at well-known addresses. On Ethereum mainnet, the canonical WETH contract is at:
0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2
Equivalent WETH contracts exist on each L2 (Arbitrum, Optimism, Base, etc.), often at different addresses. Always confirm the correct address for the chain you are on.
Use Cases
- Liquidity provision. ETH/WETH must be wrapped to enter an AMM pool
- Collateral. Lending protocols like Aave and Compound often accept WETH
- Composability. WETH can be flash-loaned, used as a quote currency, or nested inside other tokens
- Order routing. Aggregators route through WETH as a common base pair
How to Use WETH Safely
- Let the UI handle it. Most wallets and DEX front-ends wrap/unwrap automatically; you rarely need to do it manually.
- Understand it’s 1:1 and trustless. Unlike centrally wrapped assets, WETH carries only smart-contract risk — there is no custodian that can run off with the underlying ETH.
- Don’t confuse WETH with yield-bearing ETH. Holding WETH earns no staking yield. For yield, you’d use stETH/wstETH or restaked variants.
- Watch out for fake WETH. Because anyone can deploy an ERC-20 named “WETH,” always verify the contract address and source. Only the canonical WETH contract trades 1:1 with ETH.
- Unwrap when done. If you no longer need WETH for DeFi, unwrap it back to native ETH to avoid unnecessary contract interactions.
Frequently Asked Questions
Q: Does wrapping ETH cost money? A: Only gas. The wrap itself is a 1:1 swap with no fee — you get exactly as much WETH as the ETH you sent. Unwrapping is the same.
Q: Is WETH safe? A: WETH is one of the most battle-tested contracts in Ethereum, audited and holding billions of dollars in value for years. Its only risk is smart-contract risk, which is considered very low. It is not custodial — there is no company holding your ETH.
Q: Why do I see WETH in my wallet after a trade? A: Some swaps return WETH as change instead of auto-unwrapping. You can unwrap it back to native ETH via the WETH contract or your wallet’s interface.