The WETH10 team has released the latest encapsulated Ether code so that Ether (ETH) can be used in a DeFi setup. WETH10 has many useful features, especially Flash Mint, which is a development of the Quick Loan concept.

Quick loans give users the opportunity to borrow the entire liquidity mass in the protocol to use at their own request, without having to provide collateral. The only limitation is that the loan must be repaid in full within the same transaction, otherwise the loan would not exist at all.

In the DeFi society, express loans are mainly an arbitrage tool, as they provide an unlimited source of funds to everyone who works exclusively in the DeFi ecosystem. This includes the liquidation robots that the lucky liquidator earned $ 4 million from scratch in November using quick loans. Another class of fast credit users are hackers and protocol exploiters who often use it as a source of funds for their attacks.

The proliferation of hacked lending has made the concept somewhat controversial, with some arguing that it is completely negative for the ecosystem and should be eliminated. For others, they represent one of the few important DeFi innovations that democratize access to arbitrage.

One of the limitations of express loans is that the total amount available for a transaction is limited to cash locked in a specific protocol. This is where the term flashmint comes into play – instead of taking money from a liquid pool, the mechanism ejaculates tokens out of thin air and destroys them when they are no longer needed.

The amount you can get from WETH10 with mint is not infinite, as Alberto Cuesta Cañada, technical director of Yield Protocol and developer of WETH10, told Cointelegraph:

“The only limitation of WETH10 coin flash is that the number of flash coins cannot exceed 2 ^ 112-1 at any one time.”
In decimal places, the figure quoted by Cuesta Cañada contains 33 zeros, which should be enough to cover any DeFi liquidity needs. In practice, if a user needs to unscrew the WETH packaging for a specific use, there may be a limitation due to the amount of ETH stored in the WETH nodes.

Most of the DeFi WETH protocols use it in the backend, although they hide this from users by automatically unpacking and unpacking them at each interaction. If they had to upgrade to WETH10, Flash Mint could reach its full potential.

Will projects apply the new standard?
“The new standard will be gradually adopted, and it will be adopted,” said Cuesta Cañada. “Applications, not users, can use WETH10 and can not see anything for at least two months.”

It can be challenging to only certify WETH10 for the risk of increased potential losses due to code errors, but new code has many other benefits. WETH10 includes the ability to make transactions free of charge for the end user and bypasses the “token authentication” mechanism to save on gasoline and avoid security threats. An added bonus of WETH10 is that the flash coin is completely free, as opposed to express protocol protocols that charge their own fees.

Cuesta Cañada believes it will be easier for new businesses to integrate the standard, and current names are likely to do so in their next releases. It is unclear whether DeFi Projects believes that the currency risk outweighs the benefits of the new WETH standard. “No one was going to use it yet, but we were not looking for it either,” said Cuesta Cañada. He performed:

“If the offer to sell WETH10 is good enough, it will be approved. If not, then this is life, we all learned a lot and had a great time coding it.

Source: CoinTelegraph