The largest Ethereum wallets are smart contracts rather than exchange or user accounts, a sign of adoption and activity.
Wrapped Ethereum tops the charts
Two of the largest Ethereum wallets are smart contracts, data from various sources shows. The top address is a “Wrapped” ETH wallet, while the next one is the Ethereum 2.0 deposit wallet.
"The 2 main ETH addresses are now smart contracts: Wrapped Ether and Ethereum 2.0 Deposit," Nansen CEO Alex Svavenik said in a tweet. He added that the depository wallet changed Binance's largest ETH wallet just a few weeks ago.
The top 2 ETH addresses are now smart contracts:
1. Wrapped Ether
2. Ethereum 2.0 Deposit pic.twitter.com/KEvASM6nXl
– Alex Svanevik 🧭 (@ASvanevik) February 19, 2021
Wrapped Ethereum, or WETH, is the tradable ERC20 (or other token standards) version of ETH. WETH can be created by sending ETH to a smart contract which, in turn, emits WETH in a 1: 1 ratio.
The data shows that more than 5.9 million ETH (≈ $ 11 billion) is locked in a wrapped ETH contract. This means that more than 5.9 million WETH are now in circulation for other uses, such as yield agriculture, trading, and / or as collateral to earn interest.
The ETH 2.0 deposit contract, on the other hand, consists of more than 3.1 million ETH (≈ $ 6.1 billion). This is part of the network's next move toward a proof-of-stake consensus design building on its current proof-of-work design. The former would see the “stakers” validate and extract new blocks on the network, depending on the amount of ETH they have.
According to the tracking site Dune Analytics, the ETH locked in the deposit agreement belongs to more than 5420 unique depositors. 106,304 of them came from a single address, and a total of 64,846 transactions were made to the ETH 2.0 deposit agreement.
WETH but why?
Wrapped Ethereum, or WETH, is the tradable ERC20 (or other token standards) version of ETH. WETH can be created by sending ether to a smart contract where the ether is put on hold, in turn receiving the WETH ERC-20 token in a 1: 1 ratio. This WETH can be sent back to the same smart contract to be "unwrapped" or exchanged for the original Ether in a 1: 1 ratio.
This is necessary since, surprisingly, ETH is not an ERC20 compliant token. The Ethereum network was created in 2016, while ERC20 tokens were introduced much later, which means that it cannot be exchanged for other ERC20 tokens without a centralized custodian. WETH avoids this and enables smooth trading between ETH and ERC-20 tokens in a decentralized manner.
Meanwhile, even when the main addresses are smart contracts, they do not own the majority of ETH and Ethereum assets in general. That accolade goes to crypto exchanges Coinbase and Binance, with holdings of more than $ 22 billion and $ 20.5 billion in ETH respectively.
Three entities hold $ 20B + in Ethereum assets: pic.twitter.com/PuuYXdR7t4
– Alex Svanevik 🧭 (@ASvanevik) February 20, 2021
In third position is the decentralized Oracle provider Chainlink with more than $ 20.4 billion in assets. But don't worry, much of those stocks are the LINK token of the project itself.