Wrapped Litecoin (WLTC) achieved its first decentralized pair on Uniswap and is now constructing liquidity towards Ethereum (ETH). The pair was launched two weeks after the creation of the WLTC token.
Litecoin (LTC), one of many oldest legacy cryptos, was tokenized as Wrapped Litecoin (WLTC). The token launched on November 13 and has already entered the DeFi area with its first Uniswap pair.
Not like ETH and BTC, LTC was not often used as a wrapped asset. The success of WETH and WBTC got here from their use as collateral. There are some expectations that WLTC could possibly be utilized in Aave vaults, tapping into the worth of inactive cash.
Whales personal solely a small portion of the LTC, whereas a lot of the cash are owned by buyers or personal patrons. The coin additionally has a tradition of long-term possession and accumulation, with a median holding time of two.6 years. As much as 20% of the provision has been held for greater than 5 years.
The launch of WLTC buying and selling coincided with one other LTC rally on centralized exchanges. The ‘dinosaur’ coin reawakened and traded above $101 once more. LTC is very liquid, however is tougher to entry for brand spanking new retailers. The WLTC market might get a lift from DEX merchants who need not host the devoted Litecoin pockets.
After the wrapping mechanism, merchants can retailer LTC by way of MetaMask and take part within the extremely liquid DeFi ecosystem. There isn’t any assure that utilizing WLTC will likely be cheaper or smoother, as sending LTC can nonetheless incur decrease charges in comparison with Ethereum ERC-20 tokens.
The announcement of the WLTC token got here simply weeks after the Litecoin account began turning itself right into a meme coin. Nevertheless, the meme half did not take off as LTC has a special buying and selling profile, which requires a self-custodial pockets and KYC registration with an alternate. A Uniswap V3 pair can be utilized with out authentication and the wrapping contract is permissionless.
WLTC begins as a distinct segment product
The tokenized model remains to be not reliably priced as a result of extremely illiquid pool. WLTC recorded a premium of $123, whereas the spot model remained simply above $101.
WLTC traded at a premium to WETH in its first decentralized pair on Uniswap V3. | Supply: DexScreener
The attraction of the token means that merchants can put their idle LTC to work. Nevertheless, an illiquid pair and the convoluted good contract might imply that holders might not be capable to entry the LTC instantly.
The WLTC token can be simply getting began, with solely 5 addresses bridging their LTC to Ethereum. The biggest deposit is just 29 LTC. The Wrapped Litecoin concept can be supported by the Coinut alternate, which popularizes the asset.
For now, even the alternate’s group hasn’t accomplished a lot to extend WLTC’s providing or present extra liquidity. The token was promoted by Dr. Xinxi, the CEO and co-founder of the Coinut alternate. He is among the principal content material producers, aiming to revive the Litecoin model.
In comparison with the widespread adoption of LTC on exchanges and brokers, WLTC remains to be extraordinarily illiquid and dangerous. There are not any partnerships with DeFi or lending swimming pools, or extra DEX pairs. Nevertheless, if WLTC takes off, it might attain a broader viewers of DEX swappers in search of promising property.
The potential alternative for arbitrage might additionally enhance the WLTC. The present one signal has the benefit of being distinctive, with out copycats or various variations.
WLTC remains to be attempting to confirm its emblem on Etherscan and has warned that it nonetheless has just one legitimate contract deal with (CA): 0x408133907cd3A75db2B031973b9ea1C084500a15. Another contracts or tokens will be illiquid and find yourself stealing LTC.
At this stage, it’s as much as Litecoin holders to assist construct the buying and selling pair. The WLTC worth is quoted in WETH, moderately than USDT, resulting in a special worth discovery mechanism. To date, the liquidity pool solely has somewhat over 1 ETH in liquidity, making it just about inconceivable to promote WLTC at a premium.
LTC did not regain its all-time excessive above $420. Through the upcoming bull cycle, LTC is predicted to maneuver into a brand new worth vary. Lately, LTC has fallen to new lows towards BTC regardless of a short-term worth restoration above $100.
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