Let’s look at Wrapped Luna’s most recent developments now that Luna 2.0 is operational following Terra Luna’s vote for a new chain. In this article, Wrapped LUNA (WLUNA), a variation of LUNA, is contrasted with LUNA, Terra’s native platform token. With practice, you’ll be able to distinguish between the two, even though at first they might appear to be similar.
What is Wrapped Luna?
An Ethereum token called Wrapped Luna was created to stand in for Luna on the blockchain. To track the value of Terra Luna, a different ERC-20 token has been created.
Additionally, Wrapped Luna was developed to allow owners of Luna to trade, hold, and take part in decentralized finance dApps on Ethereum. By using a WLUNA partner, users can also exchange WLUNA for Luna and the other way around.
The idea of wrapped tokens can also be defined as another coin that has been tokenized and is typically tied to the value of the asset it represents. These tokens can be redeemed or “unwrapped” by users at any time.
Read More: Crypto Compare Guide 2023 – Exchanges, Wallets, Tokens & More
Wrapped Luna 2.0?
Wrapped Luna will continue to track the current Luna version, which will soon be referred to as Luna Classic, rather than following Luna 2.0.
Therefore, it won’t adhere to the Luna 2.0 price.
The snapshot for the impending airdrop did not also include the WLUNA token.
To represent the new coin, a potential new Wrapped Luna token might debut in the future, but nothing has been officially announced.
Wrapped Luna Price Falls
The cost of WLUNA, which is currently sitting at $0.00012 as of this writing, has also been impacted by the recent collapse in the price of Luna. Wrapped Luna’s immediate price drop has had an impact on WLUNA’s price, which is down 99.9%, as WLUNA is correlated to the value of Luna.
Prior to the collapse of the Terra ecosystem, Wrapped Luna hit its all-time high in November 2021 at $268.
Following the crash, Wrapped Luna suffered a similar fate as Luna, which was delisted from exchanges like Binance. The trading of Wrapped Luna will be suspended starting on May 27 according to a tweet from Coinbase, which does not support Luna. There will be no suspension of deposits or withdrawals, though.
The team contacted Coinbase about Wrapped Luna, according to TerraForm Labs CEO Do Kwon, but has not received a response.
Although Coinbase had previously stated that it would support Terra Luna, the listing for Luna has since been canceled.
The Difference Between LUNA and Wrapped LUNA
LUNA and wrapped LUNA (WLUNA) are equivalent and have the same value. LUNA is a token that exists on the Terra network, while wrapped LUNA (WLUNA) is an ERC20 token that is used to represent LUNA on the Ethereum network.
Native to the Terra network, a distinct blockchain network from the Ethereum (ERC20) network, is LUNA. Because of this, native LUNA won’t work with ERC20, so you can’t send native LUNA to a deposit address that uses ERC20.
Similar to how adding Bitcoin to wallets like Metamask is impossible because the ERC20 network is incompatible with the Bitcoin network, so to speak.
Wrapped LUNA, which can be added to Metamask, is thus a representation of LUNA on the ERC20 network.
There Aren’t Many Use Cases for Wrapped LUNA (wLUNA)
LUNA is the main token for the entire Terra ecosystem, so it has a lot of use cases such as:
- Staking LUNA on Terra Station
- Bonding LUNA as bLUNA
- Processing transactions on your Terra Station wallet
- Adding to liquidity pools on DeFi protocols
Wrapped LUNA (WLUNA), an ERC20 token, however, is incompatible with the Terra ecosystem. This is due to the inability to connect the Terra ecosystem and the ERC20 network.
As a result, there aren’t many applications for wrapped LUNA. It could potentially be used in some DeFi applications, but its primary use is to represent LUNA on the Ethereum network.
For instance, you could use WLUNA on Uniswap to create a liquidity pool.
WLUNA’s other uses on the ERC20 network are fairly limited.
There is a Wrapped Version of LUNA on the Binance Smart Chain Too
Wrapped LUNA is additionally accessible on the Binance Smart Chain, allowing you to send a tokenized variation of LUNA that is comparable to WLUNA on the ERC20 network.
From BSCScan, you can view the Binance Smart Chain contract address.
After that, you’ll be able to add it to wallets like Metamask.
The fact that Binance does not support the Binance Smart Chain version of LUNA is noteworthy, though. Only the native Terra or ERC20 versions of LUNA are accepted by Binance for deposits or withdrawals.
How Can I Convert from Wrapped LUNA to LUNA?
To convert wrapped LUNA (WLUNA) to LUNA, you will need to send WLUNA to a platform that supports both ERC20 and Terra versions of LUNA. As an alternative, you can utilize a bridge (such as converting from ERC20 to Terra via the Terra Bridge.
There are 3 platforms that support both LUNA and wrapped LUNA (WLUNA):
- KuCoin
- Gate.io
- Binance
This means that you will be able to send wrapped LUNA to any of these exchanges via the ERC20 network. I’ll use the ERC20 deposit address, for instance, to send LUNA to my KuCoin account.
Always make sure you can withdraw LUNA to the platform of your choice using the ERC20 network.
LUNA can be transferred to another wallet using the Terra (LUNA) network once it is in my KuCoin account.
A memo from the LUNA deposit address must be included when sending LUNA over the Terra network to an alternative exchange platform, such as Binance.
However, a memo is not necessary if you are sending LUNA to Terra Station.
When sending LUNA to KuCoin, it makes no difference which network is used. One account balance will eventually be created from each of them.
You can repeat the same process of ‘converting’ wrapped LUNA to LUNA on other exchanges:
- Send wrapped LUNA to the exchange via the ERC20 network
- Receive wrapped LUNA on the exchange (it will aggregate wrapped LUNA and LUNA as one balance)
- Send LUNA via the Terra network to a wallet which supports the native Terra network
On some platforms, like Coinbase and Gemini, wrapped LUNA was the only type of support available. The native Terra version cannot be withdrawn from these platforms; only the ERC20 version is possible.
You Can Use the Terra Bridge to Convert from Wrapped LUNA to LUNA Too
The Terra Bridge is a different option if you don’t want to use an exchange.
But you must have LUNA wrapped on a non-custodial wallet like Metamask.
Read More: Custodial vs Non-Custodial Wallets – Difference & Which One to Choose
Here are the steps that you’ll need to take to bridge from wrapped LUNA to native LUNA:
- Connect a non-custodial wallet that has wrapped LUNA (ERC20) inside
- Copy a Terra network deposit address (usually starts with ‘terra’) as the destination address
- Send native LUNA to the wallet that supports the Terra network
There are 2 things that you may want to note:
- You will need to pay a gas fee for this transfer, which can be quite high
- You are only able to send native LUNA to a non-custodial wallet which does not require a memo
What’s Better, Terra Luna Or Wrapped Luna?
Either LUNA or WLUNA should be purchased, depending on your particular needs. The native token of the Terra ecosystem, LUNA, can be used for a variety of tasks, including voting, voting, and paying for gas.
Wrapped Luna has a place on Ethereum because it is the most well-liked dApp platform and where some of the most well-liked Defi applications are found.
WLUNA can be lent, borrowed, traded, or stored if you have an Ethereum wallet like MetaMask. Numerous profitable operations on Terra and Ethereum might need the two assets. Your best option in this circumstance is to purchase both Terra LUNA and Wrapped LUNA.
Wrapped Luna: What’s It Good For?
Terra Luna’s practicality is absent from Wrapped Luna. It will not function within the Terra ecosystem and will not be supported by any native Terra wallets, including Terra Station. However, it also serves a variety of other purposes aside from being a wrapped token on the Ethereum blockchain. Those things are:
- Defi tokens can be held, lent, and borrowed in the thriving Ethereum Defi ecosystem.
- As with other cryptocurrencies, WLUNA can be used as a means of exchanging value;
- On exchanges like Coinbase, WLUNA can be bought and held for a long time or traded for profit.
Is There Any Way to Get Wrapped LUNA to the Terra Station?
The official Terra LUNA wallet, Terra Station, does not accept direct transfers of wrapped LUNA tokens from external wallets. Because of this, Terra Station does not accept tokens made on other blockchains.
The Terra bridge is required to convert Wrapped Luna into the original LUNA tokens because it is an Ethereum-based ERC token. There are programs and trading platforms that, like the decentralized Tera bridge, make it simple to exchange WLUNA based on the ERC-20 token for Terra Luna.
Conclusion
Unfortunately, none of the numerous Ethereum-based applications that are currently accessible can be used with Terra Luna. The Wrapped Luna was created as a result. Despite the fact that Terra Luna and Wrapped Luna are very different from one another, this article has demonstrated how they can work best when combined.
