The world of DeFi has taken the cryptocurrency space by storm over the past few months, with activity on Ethereum booming as it took the spot as the hub of DeFi. DeFi is short for decentralised finance and is essentially a number of automated smart contracts that allow users to use traditional financial tools in an entirely decentralised manner. Everything from lending/borrowing, to exchanging tokens, to margin trading and even decentralised analytics. Many people jumped on this new scene and profited greatly from it by staking tokens, lending, trading and much more. However, until not too long ago this was unfortunately only limited to Ethereum and any tokens built on it, so other cryptocurrencies were left out of this rush.
However, multiple services appeared in order to “wrap” tokens for use on Ethereum and therefore in DeFi platforms. Wrapped tokens are basically a 1-to-1 backed token on Ethereum that is backed by 1 of the original currency that is locked back on its native chain. This started with Bitcoin with tokens such as WBTC, renBTC and sBTC introducing Bitcoin on Ethereum. Over time, more coins were available in a wrapped version, and soon Dash will become one of those.
Bridging the gap
StakeHound (a well-known service that allows users to wrap coins into Ethereum tokens with a little extra bonus mentioned later) has announced recently they will be providing a wrapped version of Dash known as stakedDASH (or sDASH for short) in the coming months. As such, Dash holders will be able to lock their coins at StakeHound and receive sDASH on Ethereum that they can then use to earn more tokens on the various DeFi platforms available. Additionally, StakeHound acts as a shared masternode hosting service, so you are able to gain double the rewards. Your Dash will be put into a masternode so you help the network as well as earn income on it, you will then also be free to use your sDASH on Ethereum to earn more income through services like Uniswap. This is a great advantage to Dash as it allows anyone to not just earn greater income on their coins, but also helps Dash reach further out into the cryptocurrency space.
sDASH can then be redeemed back for your Dash at any time through StakeHound. Moreover, it is important to realise that this is just the beginning and sDASH is just the start. New versions of wrapped Dash are likely to come in the future, and more DeFi services will add support for them, giving users much more choice in both ways to get income as well as which type of service they prefer.
How Dash will benefit
It is important to mention that this is a great step forward for Dash, as it only enhances its usage and exposes more users in different sectors to it. Over time, more platforms will also support sDASH and other implementations of wrapped Dash, further increasing the ways that it can be used. With nearly 1% of the entire Bitcoin supply now being wrapped on Ethereum, it is of little doubt that wrapped tokens are a very important advancement in the space and they will see great use in the future. They are also the beginning of interoperability between different blockchains, perhaps one of the most sought after features since other cryptocurrencies grew in size. With different blockchains being able to interact with each other, this opens the door to infinite possibilities for all networks involved to benefit and grow from sharing resources, features and platforms. This shows quite the bright future for wrapped tokens, and especially wrapped Dash.
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