WTF Solidity 41. WETH

I am currently re-learning Solidity to refresh my knowledge and create a "WTF Solidity Tutorial" for beginners to use (advanced programmers may find other resources more suitable). A new lesson will be added each week.

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All code and tutorials are open-sourced on GitHub: github.com/AmazingAng/WTFSolidity

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In this lecture, we will learn about WETH - the wrapped version of ETH.

What is WETH?

WETH (Wrapped ETH) is a wrapped version of ETH. The commonly seen WETH, WBTC, and WBNB are all wrapped native tokens. Why do we need to wrap them?

In 2015, the ERC20 standard was introduced, which aimed to establish a set of standard rules for tokens on Ethereum, simplifying the release of new tokens and making all tokens on the blockchain comparable to each other. Unfortunately, Ether itself does not adhere to the ERC20 standard. The development of WETH is to improve interoperability between blockchains and allow the use of ETH in decentralized applications (dApps). It is like putting a smart contract's clothing on the native token: when the clothing is put on, it becomes WETH, complying with the ERC20 standard for fungible tokens, and can be used for dApps and cross-chain transfer. When the clothing is taken off, it can be exchanged 1:1 for ETH.

The WETH Contract

The currently used mainnet WETH contract was written in 2015, and is very old, with solidity version 0.4. We will rewrite a WETH contract using version 0.8.

WETH complies with the ERC20 standard and has two additional features compared to a typical ERC20 contract:

1. Deposit: Wrapping - users deposit ETH into the WETH contract and receive an equivalent amount of WETH.
2. Withdrawal: Unwrapping - users destroy WETH and receive an equivalent amount of ETH.

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;
import "@openzeppelin/contracts/token/ERC20/ERC20.sol";

contract WETH is ERC20 {
    // Events: deposits and withdrawals
    event Deposit(address indexed dst, uint wad);
    event Withdrawal(address indexed src, uint wad);

    // Constructor, initialize the name of ERC20
    constructor() ERC20("WETH", "WETH") {}

    // Callback function, when the user transfers ETH to the WETH contract, the deposit() function will be triggered
    fallback() external payable {
        deposit();
    }

    // Callback function, when the user transfers ETH to the WETH contract, the deposit() function will be triggered
    receive() external payable {
        deposit();
    }

    // Deposit function, when the user deposits ETH, mint the same amount of WETH for him
    function deposit() public payable {
        _mint(msg.sender, msg.value);
        emit Deposit(msg.sender, msg.value);
    }

    // Withdrawal function, the user destroys WETH and gets back the same amount of ETH
    function withdraw(uint amount) public {
        require(balanceOf(msg.sender) >= amount);
        _burn(msg.sender, amount);
        payable(msg.sender).transfer(amount);
        emit Withdrawal(msg.sender, amount);
    }
}

Inheritance

WETH conforms to the ERC20 token standard, so the WETH contract inherits from the ERC20 contract.

Events

The WETH contract has 2 events:

1. Deposit: Triggered when a deposit is made.
2. Withdraw: Triggered when a withdrawal is made.

Functions

In addition to the ERC20 standard functions, the WETH contract has 5 additional functions:

• Constructor: Initializes the name and symbol of WETH.
• Callback functions: fallback() and receive(). When a user sends ETH to the WETH contract, these functions are automatically triggered to execute the deposit() function, which mints equivalent WETH tokens.
• deposit(): Allows a user to deposit ETH and mint the equivalent amount of WETH.
• withdraw(): Allows a user to burn WETH tokens and receive back an equivalent amount of ETH.

Remix Demonstration

1. Deploy the WETH contract

Deploy the WETH contract as shown in the image.

2. Execute deposit to deposit 1 ETH, and check the WETH balance

Execute deposit function to deposit 1 ETH, and check the WETH balance.

At this point, the WETH balance is 1 WETH.

3. Transfer 1 ETH directly to the WETH contract, and check the WETH balance

Transfer 1 ETH directly to the WETH contract, and check the WETH balance.

At this point, the WETH balance is 2 WETH.

4. Call withdraw to withdraw 1.5 ETH, and check the WETH balance

At this point, the WETH balance is 0.5 WETH.

Summary

In this tutorial, we introduced WETH and implemented the WETH contract. It's like putting a smart contract on top of the native ETH: when you put on the contract, it becomes WETH, which conforms to the ERC20 standard for homogeneous tokens, can be used across chains, and can be used for dApps; when you take off the contract, it can be exchanged with ETH at a 1:1 ratio.