Litecoin Partners with Coinut to Launch Wrapped Litecoin on Ethereum
Litecoin (LTC) has partnered with Singapore-based crypto exchange Coinut to launch Wrapped Litecoin (WLTC) on the Ethereum blockchain (ETH). This initiative grants Litecoin holders access to Ethereum’s features, including staking, lending, and decentralized applications (dApps), enhancing interoperability and utility.
WLTC will maintain a 1:1 peg to Litecoin, facilitating seamless transactions between the two protocols. Coinut’s CEO, Xinxi Wang, noted that this connection links the established Litecoin ecosystem to Ethereum’s extensive services, providing new opportunities for users.
Despite this collaboration, Litecoin’s price decreased after the announcement, raising concerns about the demand for wrapped tokens amidst a decline in their usage in 2024. Although token wrapping experienced growth in early 2023, interest has since diminished. However, as one of the longest-standing altcoins, Litecoin may reignite interest in wrapped tokens through WLTC.
The objective of WLTC is to bridge the Ethereum and Litecoin networks, allowing Litecoin users to access Ethereum’s DeFi and dApp functionalities. WLTC holders can engage in Ethereum’s decentralized exchanges, enhancing liquidity and application possibilities. This offering allows Litecoin users to utilize specialized Ethereum features, including smart contracts and ERC20-based services like staking, yield farming, and borrowing, which are not natively supported by Litecoin’s blockchain.
To ensure security, Coinut has collaborated with Coinbase for cold storage solutions and Fireblocks for hot wallet infrastructure, providing robust protection for WLTC tokens. User adoption will be crucial for this initiative's success, reflecting whether token wrapping remains relevant or continues to decline.