What exactly is WETH? Why do all DeFi users need to use it?

Anyone who has traded on a DEX knows that you often see something called WETH. Many beginners get confused—isn’t this just ETH? Why does it need to be wrapped?

The Core Difference in One Sentence

ETH is Ethereum’s native coin, at the system level, used to pay gas fees. But the problem is, it doesn’t comply with the ERC-20 standard, so it can’t interact directly with most DeFi contracts.

WETH is simply ETH wrapped in an ERC-20 “jacket”, so it can be used everywhere in the ecosystem—Uniswap, Aave, all sorts of contracts recognize it.

How to Understand This “Wrapping”?

It’s simple:

• You send 1 ETH to the WETH contract → the contract mints 1 WETH for you
• The reverse: send 1 WETH back → the contract burns the WETH and returns 1 ETH to you
• The exchange rate is always 1:1, with no price difference

It’s like exchanging paper bills for coins—same value, just a different form.

Why Bother Doing This?

First: ERC-20 is the universal language of DeFi. If ETH isn’t “wrapped,” every trading pair needs custom integration code, which is super inefficient.

Second: DEX liquidity pools are built on ERC-20 tokens. WETH standardizes the format and makes everything easier.

Third: Complex DeFi strategies (like lending, liquidity mining) require standardized token interfaces. WETH solves this issue.

How to Swap?

• Directly on a DEX: Instant swap on Uniswap, SushiSwap, etc.
• Built into wallets: MetaMask, Trust Wallet, and others offer one-click conversion
• Interact directly with the contract: for advanced users

In short: If you’re playing in Ethereum DeFi, you’ll eventually need WETH. There’s no rush—just swap when needed, and it costs almost nothing.