Why does BCH convert to WBCH Podcast

Swapping BCH on the Goblins Protocol: The Role of WBCH

Swaps on the Goblins Protocol can involve Bitcoin Cash (BCH), but there’s an essential step involved: wrapping BCH into WBCH. This process ensures compatibility with the SEP-20 token standard, enabling seamless token swaps on the protocol and answers the question of why does BCH convert to WBCH.

Why does BCH convert to WBCH?

SEP-20 Compatibility
To be swappable on the Goblins Protocol, tokens must adhere to the SEP-20 standard. Since BCH was created before this standard existed, it is not natively compatible.

Creation of WBCH
WBCH was developed to bridge this gap. It is a SEP-20 token that represents BCH, allowing it to be used within the Goblins Protocol for swaps with other SEP-20 tokens.

How the Wrapping Process Works

Swaps Involving BCH:

  • Starting with BCH: When initiating a swap with BCH, the protocol automatically wraps BCH into WBCH.
  • Ending with BCH: At the end of the swap, if BCH is desired, WBCH is unwrapped back into BCH.

This process ensures that BCH can participate in the Goblins Protocol’s decentralized exchange ecosystem without compromising compatibility or functionality.

Tips and Considerations

Understanding WBCH

  • Equivalence: Remember that WBCH is equivalent to BCH in value. Wrapping and unwrapping do not change the underlying value of your holdings.
  • Trust in Protocol: The wrapping process is managed by smart contracts, ensuring security and reliability.

Using WBCH

Managing Transactions

  • Monitor Fees: Be aware of any fees associated with wrapping and unwrapping BCH. These are typically minimal but important to consider for frequent transactions.
  • Stay Informed: Keep up to date with any updates or changes to the wrapping process or the protocol itself.

Summary

The Goblins Protocol ensures seamless swapping of BCH by wrapping it into WBCH, a SEP-20 compliant token. This process enables BCH to interact within the decentralized exchange ecosystem, maintaining compatibility and functionality. By understanding and utilizing WBCH, users can effectively engage in token swaps, provide liquidity, and maximize their participation within the Goblins Protocol.