Wrapping ETH / BNB

3.5 Wrapping ETH / BNB

The interface for transacting with Ethereum’s and Binance Smart Chain native asset, ETH / BNB, is different from the standard interface for interacting with ERC-20 and BEP-20 tokens.

As a result, many other protocols on Ethereum / Binance Smart Chain do not support ETH or BNB, instead using a canonical ”wrapped ETH” token, WETH. DEX Raiden v1 is an exception. Since every DEX Raiden v1 pair included ETH/BNB as one asset, it made sense to handle ETH/BNB directly, which was slightly more gas-efficient. Since DEX Raiden v1.1 supports arbitrary ERC-20 / BEP-20 pairs, it now no longer makes sense to support unwrapped ETH. Adding such support would double the size of the core codebase, and risks fragmentation of liquidity between ETH and WETH pairs12. Native ETH needs to be wrapped into WETH before it can be traded on DEX Raiden v1.1.