Litecoin is partnering with Coinut, a Singaporean crypto exchange, to offer Wrapped Litecoin (WLTC) tokens on Ethereum. These tokens will increase interoperability between the two protocols with access to new features.

However, Litecoin’s price has dropped since this announcement, and token wrapping might not have sufficient popularity to attract broad adoption.

Litecoin’s WLTC Offering

Litecoin just announced a new collaboration with Coinut, a Singapore-based crypto exchange, to offer Wrapped Litecoin (WLTC). These tokens will be wrapped via the Ethereum network, enabling new interoperability between these two protocols. WLTC will be pegged 1:1 with Litecoin, facilitating a maximally smooth experience.

“Litecoin is trusted by millions. Now, with Wrapped Litecoin, these users can access Ethereum’s ecosystem seamlessly and confidently,” said Xinxi Wang, Founder and CEO at Coinut.

The main wave of wrapped ETH tokens took place early in 2023, with the practice losing prominence in 2024. However, Litecoin is one of the oldest surviving altcoins and still quite prominent in the market, so this announcement may bring wrapped tokens back to the spotlight. Litecoin performed well in the last month, although its price has dropped slightly since the announcement. 

According to the press release, the main goal of WLTC functionality is bridging the Ethereum and Litecoin blockchains. WLTC users will retain an equivalent value from their LTC tokens, and also gain access to several ETH apps. This will obviously include higher liquidity thanks to Ethereum-based decentralized exchanges, but there are also interesting app features.

WLTC users will enjoy some of the more specialized functions of Ethereum’s blockchain, like ERC20 smart contracts. These smart contracts can open up a whole world of specialized dApp features, such as staking, yield farming, lending/borrowing, and more. The Litecoin blockchain is not designed to accommodate these interactions. 

Coinut, for its part, has created a secure infrastructure for token wrapping. For example, it partnered with two companies for storage solutions: Coinbase for cold storage and Fireblocks for hot wallets. 

The WLTC program will offer many new opportunities to users, but that won’t guarantee market interest alone. The long-term viability of wrapped LTC tokens might signal whether token wrapping is still relevant after 2023’s higher activity.

Source : BeInCrypto - Nov 13, 2024