Wrapped Litecoin (WLTC) achieved its first decentralized pair on Uniswap and is now building liquidity against Ethereum (ETH). The pair was launched two weeks after the creation of the WLTC token.
Litecoin (LTC), one of the oldest legacy cryptos, was tokenized as Wrapped Litecoin (WLTC). The token launched on November 13 and has already entered the DeFi space with its first Uniswap pair.
Unlike ETH and BTC, LTC was rarely used as a wrapped asset. The success of WETH and WBTC came from their use as collateral. There are some expectations that WLTC could be used in Aave vaults, tapping into the value of inactive coins.
Whales own only a small portion of the LTC, while most of the coins are owned by investors or private buyers. The coin also has a culture of long-term ownership and accumulation, with an average holding time of 2.6 years. Up to 20% of the supply has been held for more than five years.
The launch of WLTC trading coincided with another LTC rally on centralized exchanges. The ‘dinosaur’ coin reawakened and traded above $101 again. LTC is highly liquid, but is harder to access for new retailers. The WLTC market could get a boost from DEX traders who don’t need to host the dedicated Litecoin wallet.
After the wrapping mechanism, traders can store LTC via MetaMask and participate in the highly liquid DeFi ecosystem. There is no guarantee that using WLTC will be cheaper or smoother, as sending LTC can still incur lower fees compared to Ethereum ERC-20 tokens.
The announcement of the WLTC token came just weeks after the Litecoin account started turning itself into a meme coin. However, the meme part didn’t take off as LTC has a different trading profile, which requires a self-custodial wallet and KYC registration with an exchange. A Uniswap V3 pair can be used without authentication and the wrapping contract is permissionless.
WLTC starts as a niche product
The tokenized version is still not reliably priced due to the highly illiquid pool. WLTC recorded a premium of $123, while the spot version remained just above $101.
WLTC traded at a premium to WETH in its first decentralized pair on Uniswap V3. | Source: DexScreener
The appeal of the token suggests that traders can put their idle LTC to work. However, an illiquid pair and the convoluted smart contract may mean that holders may not be able to access the LTC immediately.
The WLTC token is also just getting started, with only five addresses bridging their LTC to Ethereum. The largest deposit is only 29 LTC. The Wrapped Litecoin idea is also supported by the Coinut exchange, which popularizes the asset.
For now, even the exchange’s team hasn’t done much to increase WLTC’s offering or provide additional liquidity. The token was promoted by Dr. Xinxi, the CEO and co-founder of the Coinut exchange. He is one of the main content producers, aiming to revive the Litecoin brand.
Compared to the widespread adoption of LTC on exchanges and brokers, WLTC is still extremely illiquid and risky. There are no partnerships with DeFi or lending pools, or additional DEX pairs. However, if WLTC takes off, it could reach a broader audience of DEX swappers looking for promising assets.
The potential opportunity for arbitrage could also give a boost to the WLTC. The current one sign has the advantage of being unique, without copycats or alternative versions.
WLTC is still trying to verify its logo on Etherscan and has warned that it still has only one valid contract address (CA): 0x408133907cd3A75db2B031973b9ea1C084500a15. Any other contracts or tokens can be illiquid and end up stealing LTC.
At this stage, it is up to Litecoin holders to help build the trading pair. The WLTC price is quoted in WETH, rather than USDT, leading to a different price discovery mechanism. So far, the liquidity pool only has a little over 1 ETH in liquidity, making it virtually impossible to sell WLTC at a premium.
LTC failed to regain its all-time high above $420. During the upcoming bull cycle, LTC is expected to move into a new price range. In recent years, LTC has fallen to new lows against BTC despite a short-term price recovery above $100.
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