Anchorage and Tokensoft announced on Wednesday that the Zcash token would be now supported by Wrapped.
Zcash is a token used on the decentralized blockchain, which facilitates user privacy and anonymity.
Wrapped is a platform which allows the leading cryptocurrencies to be used on the Ethereum blockchain. Tokensoft took to its official Twitter handle to announce the same.
The transactions are anonymous, and user privacy is maintained by the use of ZK-SNARK (Zero-knowledge proof) to verify the payments without any information exchange. Zcash is open-source and quite like Bitcoin.
The wrapped ZEC or WZEC would allow the various Zcash holders to utilize their digital assets on the Ethereum network. The token developed by Anchorage and Tokensoft is a popular wrapped token like wBTC and WBTC. Now the users can transfer their Zcash tokens to the Eth blockchain with the WZEC.
Understanding Wrapped Coins
Wrapped coins are required to convert the centralized tokens like Bitcoin to Decentralized tokens. Most commonly, users use wBTC to convert Bitcoin to ETH. With the growing demand for Decentralized exchanges, a lot of crypto traders are transferring their digital assets to DEX like Ethereum.
The wrapped Zcash token would be staked at the price of another crypto in a 1:1 ratio, so when the user puts one ZEC in the system, one ETH-based coin of the same value is released. The technical platform for the system to manage tokens would be built by Tokensoft, while partner Anchorage would take care of the crypto holding.
The Wrapped ZEC tokens can be transferred to the native blockchain if the user wants to do so. The tokens would reinstate their initial functionality, and the smart contract would burn the associated amount of wrapped ZEC in the Ethereum blockchain and unlock ZEC coins.
High Liquidity on Ethereum
The two companies jointly said that bridging the layer one protocols on Ethereum brings high value. The Wrapped ZEC would enable the holders to use the various dApps and services on the Defi Ethereum network.
Tokensoft CEO said that they are “We’re looking forward to enabling a more interoperable form of Zcash with WZEC,.” Several wrapped tokens from Avalanche, Celo, and Handshake can be introduced in the future.
Anchorage co-founder McCauley said that the wZEC would bring more liquidity to the DeFi platforms, which would, in turn, benefit the users from the layer one features. Wrapped tokens are good for the various market players and the entire crypto landscape, he said.
