Crypto Basics

WETH vs ETH - Key Differences You Need to Know

Understand the key differences between WETH and ETH also explore their similarities, uses, and unique features in this descriptive guide.
S. Vishwa
8 Minutes
MIN

The world of cryptocurrency can be confusing, especially for newcomers. With so many tokens, coins, and platforms available, it is easy to get lost in the sea of acronyms and technical jargon. 

In this comprehensive guide, we will compare two popular cryptocurrencies, Ethereum (ETH) and Wrapped Ether (WETH). We'll also explore the key distinctions between these two digital assets to help you gain a better understanding of their unique characteristics. So, let's dive in and unravel the mysteries of WETH vs ETH!

What is ETH?

Ethereum, often referred to as ETH, is one of the leading cryptocurrencies in the world. It was created in 2015 by Vitalik Buterin and has since become a powerhouse in the blockchain industry. 

Ethereum serves as a decentralized platform that enables developers to build and deploy smart contracts and decentralized applications (dApps). As the native currency of the Ethereum network, ETH acts as a fuel for executing transactions and powering the ecosystem.

What is WETH?

Wrapped Ethereum, or WETH for short, is a tokenized version of ETH that operates on the Ethereum blockchain as well. WETH was introduced to enable the seamless interaction between ETH and other Ethereum-based tokens. 

It is essentially a representation of ETH in the form of an ERC-20 token, which makes it compatible with various decentralized exchanges (DEXs) and decentralized finance (DeFi) protocols.

Differences between WETH and ETH

When comparing WETH (Wrapped Ether) and ETH (Ethereum), there are several notable differences that set them apart. Let's explore the main distinctions between these two cryptocurrencies:

1. The Role of WETH in Decentralized Exchanges

WETH plays a crucial role in decentralized exchanges (DEXs) such as Uniswap, SushiSwap, and Balancer. These platforms primarily use ERC-20 tokens for trading, and since ETH is not an ERC-20 token by default, it cannot be directly traded on these exchanges.

By wrapping ETH into WETH, users can easily participate in trading activities on DEXs, providing liquidity and engaging in various decentralized finance (DeFi) opportunities.

2. Interoperability and Cross-Chain Applications

While Ethereum is primarily focused on its native blockchain, WETH enhances interoperability by enabling ETH to be used in cross-chain applications. Through various protocols like RenVM and bridges like the Ethereum Mainnet Bridge, WETH can be transferred and utilized on other blockchains, expanding its reach and potential use cases.

3. Differences in Usage and Liquidity

One significant difference between WETH and ETH lies in their usage and liquidity. ETH is the original currency of the Ethereum network and is widely accepted as a medium of exchange, fuel for transactions, and a store of value.

On the other hand, WETH is predominantly used in decentralized finance (DeFi) applications and token trading on DEXs. Its liquidity is centered around the DeFi ecosystem, making it a popular choice for yield farming, liquidity provision, and other decentralized finance activities.

4. Gas Fees and Transaction Costs

Gas fees and transaction costs are important considerations for users of both ETH and WETH. Gas fees are the fees paid to miners or validators for processing transactions on the Ethereum network.

When it comes to gas fees, there is no inherent difference between ETH and WETH. Both tokens require gas fees for transactions and interactions with smart contracts. The cost of gas fees depends on the network congestion and the complexity of the transaction.

5. Wrapping and Unwrapping Process

To convert ETH into WETH, users need to go through a wrapping process. This process involves depositing ETH into a smart contract that mints an equivalent amount of WETH tokens. The WETH tokens can then be freely traded and utilized within the Ethereum ecosystem.

Conversely, to unwrap WETH and convert it back into ETH, users need to send their WETH tokens to the smart contract, which will burn the WETH and release the equivalent amount of ETH back to the user's wallet.

WETH vs ETH

6. Security and Trust

When it comes to security and trust, both ETH and WETH inherit the robustness and reliability of the Ethereum blockchain. The Ethereum network has a proven track record of security and resilience, making it a trusted platform for decentralized applications and financial activities.

However, it's important to note that wrapped tokens like WETH introduce an additional layer of complexity and reliance on smart contracts. While efforts are made to ensure the security of these contracts, users should always exercise caution and perform due diligence when interacting with wrapped tokens.

7. Integration with DeFi Protocols

Wrapped Ethereum (WETH) has become an integral part of the decentralized finance (DeFi) ecosystem. Many DeFi protocols and platforms rely on WETH as a liquidity source and collateral for borrowing and lending activities. WETH's compatibility with ERC-20 standards makes it easier for developers to integrate it into their DeFi applications, enabling seamless access to a wide range of decentralized financial services.

8. Use Cases and Diversification

While ETH and WETH share similarities, they have distinct use cases and target different aspects of the Ethereum ecosystem. ETH, as the native currency, is widely used for everyday transactions, investment purposes, and as a means of participating in initial coin offerings (ICOs) and token sales.

WETH, on the other hand, caters specifically to the decentralized finance sector, providing liquidity and facilitating token trading within the Ethereum ecosystem.

Popular platforms that accept WETH

There are several popular platforms and dapps that accept WETH. Here are some of the most notable:

Uniswap: A decentralized exchange (DEX) that allows users to trade ERC-20 tokens, including WETH.

Compound: A decentralized lending and borrowing platform that allows users to earn interest on their assets, including WETH.

MakerDAO: A decentralized lending platform that allows users to borrow stablecoins using WETH as collateral.

How to convert ETH to WETH?

Converting ETH to WETH is a relatively simple process. There are several ways to do this, but the most common method is to use a decentralized exchange (DEX) like Uniswap. Here are the steps to convert ETH to WETH using Uniswap, as example:

  • Go to the Uniswap website and connect your Ethereum wallet.
  • Select ETH as the token you want to convert and WETH as the token you want to receive.
  • Enter the amount of ETH you want to convert and click on the "Swap" button.
  • Confirm the transaction on your wallet and wait for the conversion to complete.

Once the conversion is complete, you will receive the equivalent amount of WETH in your wallet.

Advantages of using WETH

There are several advantages of using WETH over ETH in certain applications. Here are some of the main advantages:

  • Compatibility: WETH is compatible with ERC-20 tokens, which means it can be used in dapps and exchanges that only accept ERC-20 tokens.
  • Liquidity: WETH can be used to provide liquidity for ERC-20 tokens on decentralized exchanges (DEXs), which can help improve the efficiency of the market.
  • Accessibility: WETH makes it easier for users to interact with the Ethereum ecosystem, as it provides a more compatible and accessible version of ETH.

Disadvantages of using WETH

While there are several advantages to using WETH, there are also some disadvantages to consider. Here are some of the main disadvantages:

  • Conversion: Converting ETH to WETH can be an extra step that some users may find inconvenient.
  • Security: WETH is an ERC-20 token, which means it is subject to the same security risks as other tokens on the Ethereum network.
  • Complexity: The use of WETH can add an extra layer of complexity to certain applications and may require additional knowledge or expertise.

Future of WETH and ETH

The future of WETH and ETH is closely tied to the development of the Ethereum ecosystem and the wider cryptocurrency market. As the adoption of Ethereum and other blockchain technologies grows, the demand for both ETH and WETH is likely to increase.

One potential area of growth for WETH is in the decentralized finance (DeFi) space. DeFi protocols rely on liquidity providers to supply assets to their platforms, and WETH can be used as a way to provide liquidity for ERC-20 tokens. As DeFi continues to grow, the demand for WETH is likely to increase.

Also Read - Is Ethereum Dead?

FAQs

Q1. WETH vs ETH: Which is better?

Choosing between WETH and ETH depends on your needs. ETH is versatile, used for everyday transactions, investments, and ICOs. WETH is mainly for DeFi and token trading on DEXs. If you're into DeFi and ERC-20 tokens, WETH is a good fit. For general purposes, ETH is more versatile. Consider your specific requirements to decide which is best for you.

Q2. Can I convert WETH back to ETH at any time?

Yes, the wrapping process is reversible, allowing you to convert WETH back to ETH whenever you desire. Simply send your WETH tokens to the smart contract, and the equivalent amount of ETH will be released to your wallet.

Q3. Is WETH cheaper than ETH?

The cost of WETH and ETH is generally the same in terms of value. However, when it comes to transaction costs, gas fees are incurred for both WETH and ETH transactions on the Ethereum network. The gas fees are determined by factors such as network congestion and transaction complexity, rather than the specific token being used. Therefore, there is no inherent difference in the cost of using WETH or ETH in terms of transaction fees.

Q4. Can I use WETH in other blockchain networks?

WETH is primarily designed to operate within the Ethereum blockchain. While there are bridge protocols and cross-chain solutions that allow the transfer of assets between different blockchains, the native use of WETH is limited to the Ethereum ecosystem.

Closing Thoughts

In conclusion, understanding the differences between WETH and ETH is crucial for anyone navigating the Ethereum ecosystem.

Both WETH and ETH have their unique use cases and advantages, catering to different aspects of the blockchain industry. Whether you're an investor, trader, or user of decentralized applications, being aware of these distinctions will empower you to make informed decisions and leverage the full potential of the Ethereum ecosystem.

Disclaimer

The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website's content as such.

Token Metrics does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

Build Smarter Crypto Apps &
AI Agents in Minutes, Not Months
Real-time prices, trading signals, and on-chain insights all from one powerful API.
Grab a Free API Key
Token Metrics Team
Token Metrics Team

Recent Posts

Announcements

🚀 Token Metrics API Goes Live on Hacker News – The AI Crypto Toolkit for Builders

Token Metrics Team
5 min
MIN

The Token Metrics API has officially launched on Hacker News, marking a major milestone in our mission to bring AI-powered crypto insights to every developer, founder, and builder in the Web3 space.

If you're building trading bots, dashboards, investment tools, or AI agents that interact with the crypto market, this is your developer edge in 2025. Forget raw feeds and static charts—this is real-time, AI-grade crypto intelligence available in minutes via a single API key.

What Is the Token Metrics API?

The Token Metrics API is a powerful crypto intelligence engine built for developers who want more than just price data. It combines machine learning, quantitative modeling, and narrative indexing to deliver structured signals that help users make smarter trading decisions.

Instead of simply showing what the market did, the API helps predict what it might do—with insights like:

  • Trader & Investor Grades (0–100 scores on momentum and fundamentals)
  • Bullish/Bearish Signals across 6,000+ assets
  • Narrative-based Indices like DeFi, AI, Memes, RWAs, and more
  • Quantitative Risk Scores and sentiment analysis
  • Real-time updates, no lag, no stale metrics

It’s like giving your crypto bot a brain—and not just any brain, an AI-trained crypto analyst that never sleeps.

Why It’s Different from Every Other Crypto API

Most APIs give you prices, volume, and maybe some on-chain data. Token Metrics gives you opinionated intelligence derived from over 80 on-chain, off-chain, technical, and sentiment indicators.

That means:

  • Your dashboard users get real-time grades and trending tokens.
  • Your AI agent can speak fluently about token fundamentals.
  • Your bot can act on bullish flips before the rest of the market.

We’ve designed this API for modularity and plug-and-play usability. With 21+ endpoints and official SDKs, you can ship faster and smarter—no custom pipeline needed.

What Can You Build?

Whether you're a solo developer or building inside a Web3 team, the possibilities are wide open.

Build smarter with Token Metrics if you’re creating:

  • 🧠 AI trading agents that query real-time token grades
  • 📊 Investor dashboards that surface top-rated altcoins
  • 📈 DApps that alert users to sector momentum shifts
  • 📱 Mobile apps with embedded market signals
  • 🧪 Backtesting systems for narrative-based portfolio strategies

Because the API supports OpenAI, Claude, Cursor, and Raycast integrations, your agents and LLM-powered tools can query live crypto intelligence in natural language—no additional parsing required.

Why the Hacker News Feature Matters

Token Metrics API just made it to the front page of Hacker News, one of the internet’s most trusted platforms for discovering high-impact developer tools.

This means:

  • 💬 A community of builders and engineers is already testing the API
  • 🧪 Feedback is pouring in, helping us evolve faster
  • 🚀 Your early adoption puts you ahead of the curve

If you’ve been waiting for the right time to integrate AI-native crypto signals into your product—this is it.

Get Started for Free

We’re offering 5,000 free API calls/month for every new developer.

Sign up, plug in your key, and build:

  • With one consistent schema
  • Across multiple clients
  • Without chasing multiple API docs

Your users don’t just want raw data anymore—they want insights. Token Metrics delivers those insights in real time, with zero guesswork.

Join the Developer Revolution

💥 Explore the API – Get your key in 30 seconds
💬 Join the Hacker News discussion – See what other devs are saying
📚 Browse Docs – View full endpoints and SDKs

One API. One schema. Smarter crypto apps.
The future of crypto building is AI-powered—and it starts here.

Research

Bullish or Bearish? Interpreting AI Signals in Today’s Volatile Crypto Market

Token Metrics Team
5 min
MIN

Introduction

Crypto moves fast — and traders who can't read the signs get left behind. But in a market where emotions dominate, how do you distinguish between a real trend and a fakeout? That’s where AI-powered trading signals come in.

Token Metrics AI monitors over 6,000 tokens using 80+ data points, from technical momentum to on-chain activity and social sentiment. Its bullish and bearish signals aren’t just flashes of color — they’re actionable, data-driven insights that can guide decisions in chaotic markets.

In this post, we break down how to interpret bullish and bearish signals, what they’ve been saying recently, and how to react when market direction flips suddenly.

What Are Bullish and Bearish Signals?

Let’s start with the basics:

  • Bullish Signal (Green Dot): Indicates that a token is showing signs of an upward trend based on combined technical, sentiment, and on-chain analysis.
  • Bearish Signal (Red Dot): Suggests that a token is losing momentum, and price downside or stagnation is likely.

But these signals aren’t standalone — they come with contextual grades, like the Trader Grade, which ranks signal strength from 0 to 100. This allows you to not just know the direction, but the confidence behind it.

What Happened Recently? The May 30 Flip

On May 30, 2025, Token Metrics AI issued a broad bearish flip across much of the market. That included:

  • Ethereum
  • Bittensor
  • Launchcoin
  • Many Real World Asset and L2 tokens

The AI signal flipped red, and Trader Grades fell across the board. Why? Here's what the AI detected:

  • Slowing volume
  • Negative sentiment shift
  • Liquidity thinning on DEXs
  • On-chain accumulation stalling

This wasn’t panic-driven — it was a data-driven, proactive warning that the cycle had peaked. In a world where most traders rely on lagging indicators or Twitter sentiment, this was an edge.

How to Interpret a Bullish Signal

A bullish signal isn’t an instant “buy” — it's a call to investigate. Here's what to check when a green dot appears:

✅ 1. Trader Grade Above 80

This means high conviction. If it's between 60–79, the trend is forming, but may lack strength.

✅ 2. Volume Confirmation

Price up + volume up = good. Price up + volume flat = caution.

✅ 3. Narrative Alignment

If the token fits a hot theme (like RWAs or AI), that adds strength to the signal.

✅ 4. Recent Price Action

Did the signal appear after a breakout, or just before? Entry timing depends on whether you're catching the beginning or chasing the middle of the trend.

✅ 5. Compare to Peers

If 3–5 similar tokens are also turning bullish, that indicates sector-wide rotation — a better entry environment.

How to Interpret a Bearish Signal

Red doesn’t mean "dump immediately" — it means it's time to tighten your risk.

❗ 1. Trader Grade Below 50

This indicates deteriorating conviction — exit or reduce exposure.

❗ 2. Volume Divergence

If price is flat but volume is fading, that’s a warning of a potential breakdown.

❗ 3. Signal Timing

Did the bearish flip happen near local highs? That’s often the best exit point.

❗ 4. Check for Repeats

Was this the second red dot in a week? That could confirm a longer-term downtrend.

❗ 5. BTC/ETH Context

If Bitcoin or ETH also flip bearish, it may suggest macro pressure, not just token-specific weakness.

Real-Time Examples from the Webinar

During the June 5 Token Metrics webinar, we walked through examples of how these signals worked in real time:

🟢 Bullish (April) – Launchcoin

Strong signal, grade in the 80s. Resulted in a massive short-term run.

🔴 Bearish (May 30) – Ethereum

Signal turned red around $3,490. Traders who followed it avoided the 55% drawdown that followed.

🔴 Bearish (June) – Fartcoin

After a 700% run-up, the signal flipped bearish with a low Trader Grade of ~24. Result? A slow bleed lower as sentiment cooled.

What Makes AI Signals Different from Traditional TA?

Feature                                                    Token Metrics AI                     Traditional TA

Combines social + on-chain                    ✅                                       ❌

Updated in real time                                 ✅                                       ❌

Machine learning trained on past data   ✅                                       ❌

Outputs confidence grade                       ✅                                       ❌

Adapts to new narratives                         ✅                                       ❌

This isn’t about moving averages or MACD — it’s about combining the entire digital footprint of a token to anticipate what comes next.

How to React to a Signal Flip

What do you do when your favorite token suddenly flips from bullish to bearish?

  1. Reduce exposure immediately — even if you don’t sell everything, cut risk.
  2. Check the Grade — if it’s falling, momentum is likely over.
  3. Watch Peer Tokens — if similar projects are also turning red, it confirms sector rotation.
  4. Set New Alerts — if the signal flips back to green, be ready to re-enter.

Your job isn’t to predict the market. It’s to respond to what the data is saying.

How to Combine AI Signals with a Strategy

Here’s a basic framework:

Entry

  • Bullish signal + Trader Grade > 80 = enter with full size.
  • Grade 60–79 = enter small or wait for confirmation.

Exit

  • Bearish signal = scale out or exit.
  • Grade < 50 = no new positions unless for short trades.

Risk

  • Position size scales with grade.
  • Only trade tokens with high liquidity and volume confirmation.

This keeps your system simple, repeatable, and data-driven.

Conclusion

In volatile markets, conviction matters. Token Metrics AI doesn’t just point up or down — it tells you how strong the trend is, how likely it is to last, and when it’s time to pivot.

Don’t trade on emotions. Don’t chase hype. Use the signals — and trust the grade.

Because in a market that never sleeps, it pays to have an AI watching your back.

Research

Crypto Market Cools Off: What Is Token Metrics AI Saying Now

Token Metrics Team
5 min
MIN

Introduction

The euphoria of April and May in the crypto market has officially hit the brakes. While traders were riding high just weeks ago, the mood has shifted — and the data confirms it. Token Metrics’ proprietary AI signals flipped bearish on May 30, and since then, the market has been slowly but steadily declining.

In this post, we break down what’s happened since the bearish signal, how major altcoins and sectors are reacting, and what Token Metrics’ indicators are telling us about what might come next.

The Big Picture: Cooling Off After a Hot Q1 and Q2 Start

The platform’s AI signal turned bearish on May 30 when the total crypto market cap hit $3.34 trillion. Since then, the momentum that defined early 2025 has reversed.

This wasn’t a sudden crash — it’s a slow bleed. The signal shift didn’t come from headline-driven panic, but from data-level exhaustion: volume softening, sentiment stalling, and trend strength fading across most tokens.

Token Metrics AI recognized the shift — and issued the warning.

What the Bearish Signal Means

The AI model analyzes over 80 metrics across price, volume, sentiment, and on-chain data. When key trends across these data sets weaken, the system flips from bullish (green) to bearish (red).

On May 30:

  • Trader Grades across most tokens declined
  • Signal sentiment flipped bearish
  • Momentum and velocity cooled down

According to the model, these were signs of a broad de-risking cycle — not just isolated weakness.

Sectors Showing Declines

Even tokens that had been performing well throughout Q2 began to stall or roll over.

🚨 Launch Coin

Previously one of the top performers in April, Launch Coin saw its grades decrease and price action softened.It may even be rebranding — a typical signal that a project is pivoting after a hype cycle.

🏦 Real World Assets (RWAs)

RWAs were hot in March–May, but by early June, volume and signal quality had cooled off significantly.

🔐 ZK and L2s

Projects like Starknet and zkSync, once dominant in trader attention, have seen signal strength drop, with many now scoring below 70.

The cooling effect is broad, touching narratives, sectors, and high-performing individual tokens alike.

The Bull-Bear Indicator in Action

One of the key tools used by Token Metrics is the Bull vs. Bear Indicator, which aggregates bullish vs. bearish signals across all tokens tracked.

As of early June:

  • The percentage of tokens with bullish signals dropped to its lowest since January.
  • New projects launching with strong grades also saw a decline.
  • Even community-favorite tokens began receiving “exit” alerts.

This isn’t fear — it’s fatigue.

How Traders Are Reacting

During the webinar, we noted that many users who rely on Token Metrics signals began rotating into stables once the May 30 signal flipped. Others reduced leverage, paused entries, or shifted into defensive plays like ETH and BTC.

This reflects an important philosophy:

"When the data changes, we change our approach."

Instead of trying to fight the tape or chase rebounds, disciplined traders are using the bearish signal to protect gains and preserve capital.

What About Ethereum and Bitcoin?

Even ETH and BTC, the two bellwether assets, aren’t immune.

  • Ethereum: Lost momentum after a strong May push. Its Trader Grade is dropping, and the AI signals currently reflect neutral-to-bearish sentiment.
  • Bitcoin: While still holding structure better than altcoins, it has also declined since peaking above $72k. Volume weakening and sentiment falling suggest caution.

In previous cycles, ETH and BTC acted as shelters during altcoin corrections. But now, even the majors show weakness — another reason why the bearish flip matters.

What Could Reverse This?

Abdullah Sarwar, head of research at Token Metrics, mentioned that for the signals to flip back bullish, we would need to see:

  • Increased momentum across top tokens
  • New narratives (e.g., real-world utility, cross-chain demand)
  • Higher volume and liquidity inflows
  • Positive macro or ETF news

Until then, the system will remain in defensive mode — prioritizing safety over chasing trades.

How to Act During a Bearish Signal

The team offered several tips for traders during this cooling-off period:

  1. Reduce exposure
    Don’t hold full positions in assets with weak grades or bearish signals.

  2. Watch signal reversals
    Keep an eye on sudden bullish flips with high Trader Grades — they often mark trend reversals.

  3. Rebalance into safer assets
    BTC, ETH, or even stables allow you to sit on the sidelines while others take unnecessary risk.

  4. Use Token Metrics filters
    Use the platform to filter for:

    • Top tokens with >80 grades
    • Signals that flipped bullish in the last 3 days
    • Low market-cap tokens with strong on-chain activity

These tools help find exceptions in a weak market.

Conclusion: Bearish Doesn’t Mean Broken

Markets cycle — and AI sees it before headlines do.

Token Metrics' bearish signal wasn’t a call to panic. It was a calibrated, data-backed alert that the trend had shifted — and that it was time to switch from offense to defense.

If you’re navigating this new phase, listen to the data. Use the tools. And most importantly, avoid trading emotionally.

The bull market might return. When it does, Token Metrics AI will flip bullish again — and you’ll be ready.

Choose from Platinum, Gold, and Silver packages
Reach with 25–30% open rates and 0.5–1% CTR
Craft your own custom ad—from banners to tailored copy
Perfect for Crypto Exchanges, SaaS Tools, DeFi, and AI Products