The Rise of Rehypothecated Crypto: Exploring Wrapped, Staked, and Restaked Tokens
It has been 15 years since the creation of Bitcoin's first block, and during this time, the Web3 industry has made remarkable progress. It has expanded into various fields, influencing financial sectors and areas beyond them. Today, the Web3ecosystem is a complex and dynamic structure where technology, economics, and innovation intersect, creating new ways to interact with digital assets.
Recently, it has become common to analyze different categories of cryptocurrencies by grouping them and tracking their total market capitalization over specific periods, usually 24 hours. This approach allows users to quickly see how the value of assets within a group has changed in a day. It’s an essential tool for investors, analysts, and anyone who wants to follow price trends and identify growth or decline patterns.
In this article, Coinmooner focused on one such group of projects in the Web3space. We selected three of the most notable projects in this category to highlight their features and contributions. CoinMooner aims to analyze assets from the Top Rehypothecated Crypto group, which includes wrapped, staked, and restaked tokens, and examine them from the perspective of market capitalization.
Wrapped crypto assets are tokens backed 1:1 by an underlying asset. Their primary purpose is to enable compatibility and interaction between different blockchains. One of the first such tokens was Wrapped BTC, introduced by BitGo. It’s an ERC-20 token fully backed by Bitcoin, significantly expanding Bitcoin’susability within the Ethereum network.
Staking involves locking up crypto assets for a certain period to support blockchain operations. In return, users receive additional rewards from the same assets. Among the most well-known staking solutions is the Lido platform, which offers user-friendly tools to simplify participation in staking.
Restaking allows users to use previously staked assets for additional benefits. This increases their liquidity and generates even more rewards. A leader in this field is the Eigenlayer protocol, which provides innovative solutions for restaking. This category of assets stands out because it includes tokens that have been staked multiple times, giving them unique properties and more excellent utility within the ecosystem. Let’s look at three leaders in this category that meet these criteria.
LIDO
The first leader our team at Coinmooner wants to highlight is Lido. Simply put, it’s a decentralized protocol that offers a way to stake Ethereum (ETH) without locking it up completely. Its main product is stETH, a token you receive when you stake ETH on Lido. Staking helps keep the Ethereum network secure using the Proof-of-Stake (PoS) system, which is more energy-efficient and scalable than the older Proof-of-Work system.
What makes Lido special is that it removes the need to stake a minimum of 32 ETH, which the Ethereum network requires. Instead, you can stake any amount, making it accessible for everyone. Another big advantage is liquidity: normally, staked ETH is locked until upgrades like Shapella are completed. But with Lido, you get stETH in return for your staked ETH, which you can trade, lend, or use as collateral in DeFi apps.
Lido also works with top validator teams like P2P Validator, Chorus One, and Stakefish to reduce the risk of lower rewards caused by validator issues.
Lido is managed by a decentralized autonomous organization (DAO), meaning the community decides how it operates. Professional teams, validators, and partners handle its development and maintenance. Lido has also partnered with big names in the crypto space like Curve Finance, Yearn Finance, and 1inch Network, and its code has been audited by top security firms, including Quantstamp and Trail of Bits, ensuring reliability and safety.
Lido has become very popular in the Ethereum community thanks to its flexibility. stETH is widely used across many DeFi apps, giving stakers not only rewards for supporting the network but also more ways to manage their assets. Currently, over 9.7 million stETH tokens are in circulation, with a market cap of $34.1 billion, showing just how important and trusted Lido is.
WRAPPED TRON
The next leader Coinmooner wants to highlight is Wrapped TRON (WTRX). WTRX is a token based on the TRON (TRX) network that is widely used in decentralized finance (DeFi). It allows users to participate in activities like providing liquidity, token swaps, margin trading, and other DeFi protocols. The key feature of WTRX is that it follows the ERC-20 standard, which means TRX holders can use their tokens in other blockchain ecosystems like Ethereum without needing to convert them.
WTRX is a "wrapped" token, meaning it’s backed 1:1 by TRX. Users can "wrap" their TRX by sending it to a smart contract, which creates an equivalent amount of WTRX on the Ethereum network. The reverse process allows users to unwrap WTRX back into TRX. This makes it easy to move between different blockchains, increases liquidity, and connects ecosystems. TRX holders can use their assets on Ethereum-based platforms while maintaining the value of their tokens.
Wrapped TRON is essential for TRON’s strategy of creating bridges between blockchains. This increases liquidity, makes it easier to move assets across chains, and encourages innovation in DeFi. The project plans to expand WTRX support to other blockchains, like BNB Chain, Polygon, and Solana, and introduce new products like lending, staking, yield farming, and governance mechanisms.
What makes WTRX unique is its close tie to the price of TRX, which ensures there’s no price gap and builds trust among users—the token benefits from faster transactions, low fees, and scalability found in other blockchains. Using WTRX helps users reduce costs and maximize returns in DeFi protocols, offering new opportunities to diversify portfolios and interact with multi-chain systems. There are 87.42 billion WTRX in circulation with a market cap of $18.2 billion.
WRAPPED BITCOIN
Wrapped Bitcoin is a tokenized version of Bitcoin (BTC) on the Ethereum (ETH) blockchain. Unlike regular Bitcoin, WBTC is compatible with ERC-20, the standard for Ethereum tokens, allowing it to fully integrate into decentralized applications (DeFi) like decentralized exchanges, crypto lending, prediction markets, and other financial services on Ethereum. This opens up new ways to use Bitcoin on platforms that support Ethereum.
WBTC is backed 1:1 by real Bitcoin, with this guarantee ensured by trusted merchants and custodians. This keeps the price of WBTC equal to Bitcoin’s, providing liquidity and stability. It allows users to quickly move funds between the BTC and ETH networks in a decentralized and autonomous way, making WBTC a valuable tool for operations on both platforms.
The Wrapped Bitcoin project was announced on October 26, 2018, and officially launched on January 31, 2019. Since then, WBTC has become an essential part of the DeFi ecosystem, offering new ways for users to use Bitcoin. WBTC can be traded on popular decentralized exchanges like Uniswap, 1Inch, and Sushiswap and used in DeFi protocols like Aave, Balancer, Compound, and MakerDAO.
One of the most popular uses of WBTC is as collateral for crypto loans. Users can earn interest by providing liquidity on DeFi platforms or participating in margin trading, where WBTC helps secure the trade. This process is fully managed by smart contracts, making it transparent, secure, and free from third-party involvement.
CoinMooner believes this article will be helpful not only for those interested in the technical side of the Web3 industry but also for a wider audience, including investors, analysts, and users who want to improve their knowledge of current trends in the cryptocurrency markets. We will continue to follow the most promising cryptocurrencies and projects and keep our readers updated!
In conclusion, Coinmooner wants to remind everyone that in the Web3 industry, it's vital to use the latest security methods to protect yourself and your finances. Users should stay alert and keep track of technological developments to minimize risks and manage their assets effectively.
