What the Heck is WETH?
WETH (Wrapped Ether) is ETH locked in a smart contract and reissued as an ERC-20 token, pegged 1:1. Same value, just dressed for DeFi. No weird tricks — just a wrapper your dApps can actually read.
Wrap it. Then put it to work.
Five things you can do with WETH, on one screen.
Why bother?
ETH shipped before the ERC-20 standard did, so it has no
approve or transferFrom. A contract built for tokens literally cannot handle
raw ETH. WETH gives it the interface every dApp already speaks — and the contract has no fee, no admin
key and no way to be paused.
One base asset
to rule them all
Roughly four out of five Ethereum DEX pools quote against WETH rather than raw ETH. Wrapping once and staying wrapped saves a transaction on every round trip.
Borrow without selling
Supplying WETH earns the supply rate and unlocks a credit line against it. The health factor is the only number that matters — below 1.0 you get liquidated, and a 20% ETH drop moves it a long way.
| Market | Supply | Borrow | Max LTV |
|---|---|---|---|
| Aave v3 | 2.14% | 4.86% | 82.5% |
| Morpho Blue | 2.68% | 4.10% | 86.0% |
| Compound v3 | 1.92% | 5.24% | 80.0% |
| Euler v2 | 3.05% | 5.90% | 85.0% |
Impermanent loss, plainly
If ETH doubles while you're in a WETH/USDC pool, the pool sells ETH into the rally on your behalf. You end up with more dollars and less ETH than if you'd just held — about 5.7% worse at 2×. Fees have to make that back.
Correlated pairs like WETH/stETH barely move against each other — less IL, and that's exactly why their fee tier is lower.
Vaults, not validators
This isn't proof-of-stake — WETH can't secure anything. These vaults run a strategy with your deposit (lending, basis trades, LP rotation) and hand back a receipt token that grows in value. Longer lock, bigger number, more ways to be wrong.
Questions people actually ask
What the heck is WETH?
Wrapped Ether. You deposit ETH into a smart contract; it mints an ERC-20 token backed 1:1 by that deposit. Burn the token, get the ETH back. That's the entire mechanism — no yield, no rebase, no governance, no fee.
Why does it need to exist?
ETH shipped before the ERC-20 standard, so it doesn't implement approve or
transferFrom. Rather than every protocol special-casing raw ETH, the ecosystem agreed on
one wrapper. Now a DEX treats ETH exactly like USDC.
What does wrapping cost?
Gas and nothing else. A wrap is about 45,000 gas, an unwrap about 30,000 — roughly $0.94 and $0.63 at 6 gwei. The contract takes no fee and no spread.
Can I unwrap whenever?
Yes. withdraw burns your WETH and returns the ETH in the same transaction. No lock, no
queue, no whitelist. If you can pay gas, you can exit.
Is the contract safe?
WETH9 has been live since 2017, has held millions of ETH continuously, and is immutable with no admin key — nobody can pause it, upgrade it or drain it. The real risk is whichever protocol you deploy WETH into, not the wrapper.
Does holding WETH earn anything?
No. WETH in a wallet is inert. Every rate on this page comes from lending it, pooling it or handing it to a vault strategy — each adding risk that plain WETH doesn't have.