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Wrapping and the 3 Tokens

What is Token Wrapping?

You may have seen tokens in the space before with a “w” in the front of the name before such as wETH. This “w” stands for wrapped. A wrapped token is a version of a crypto currency that is “pegged” or reflects the value of the asset it represents. So for instance, with wETH or wrapped ether, it reflects the same price as ETH but the difference being that it usually represents a crypto token that doesn’t natively live on the blockchain that it was issued in.
Think of wrapping a token as being able to encapsulate all of a token’s value into another token. You may be wondering what this is good for or what is the point? Wrapped tokens provide a user the ability to use tokens between different blockchains, for example, wBTC on the Ethereum blockchain. This means that you can bring over your BTC assets and use them on Ethereum. For a regular user, you don’t have to worry about the inner workings of wrapping. You can just trade the wrapped version the same way you would trade the regular version.

The 3 tokens of ENCTR

ENCTR = Regular ENCTR
sENCTR = Staked ENCTR
gENCTR = Wrapped AND Staked ENCTR

Why is it called gENCTR?

gENCTR stands for Gaming ENCTR but technically speaking, it is both Wrapped and Staked ENCTR. The reason we called it Gaming ENCTR is because its use is important in the various modules we are creating - all surrounding the Play & Earn space.

How does gENCTR work in the ecosystem and what does it mean for me?

When you stake ENCTR, you can stake ENCTR to either sENCTR or gENCTR. If you read our previous blog post on sENCTR, you know what staking is. When you stake ENCTR you can choose to receive sENCTR or gENCTR.
  • sENCTR increases your token supply with every rebase event
  • gENCTR does not increase your token supply with every rebase event but increases the value within it every rebase event.‍
Let’s take this example: You have 100 ENCTR and you go to the ENCTR app to see that with every rebase event (or compounding event) you will get 1 ENCTR if you stake it. So you then go and stake your 100 ENCTR to sENCTR.
You now have 100 sENCTR that is generating a % APY compounding every 8 hours (a rebase event). Let’s say 8 hours have passed and a rebase occurred. Now you have 101 sENCTR. When you stake to sENCTR, your balance is always increasing every rebase event.
Now let’s take the same example but using gENCTR. Remember, gENCTR is staked AND wrapped ENCTR. This means that on every rebase you are still getting the rebase rewards, but your token supply is not increasing.
Going back to the example: you have 100 ENCTR. You stake to gENCTR and now have 100 gENCTR. Let’s say 8 hours pass and a rebase event occurred. You will still have 100 gENCTR but in the background, gENCTR knows that a rebase event occurred but you will not see this value until you “un-wrap” your gENCTR back to sENCTR or back to ENCTR.

Why is this good?

gENCTR allows you to now trade your ENCTR across different blockchains (first one will be Polygon) and still get all of your rebase rewards. Think of gENCTR as a treasure chest of coins and each coin in the treasure chest is 1 ENCTR. Every rebase event creates a new coin in that chest. You can trade this chest to someone else and it continues to grow coins inside of it.

Tax Purposes

We are not tax advisors and this is not tax advice. In the US for instance, every “rebase” is a taxable event. Holding your staked ENCTR to gENCTR allows you to choose when your taxable event occurs!

TL;DR

For most users, gENCTR is the token you want to get when staking ENCTR. It allows you to trade across different blockchains and move assets to and from Polygon for use in our modules. With every rebase event, the value in gENCTR increases rather than its token supply. You can see this value based on how many rebase events occurred and can “realize” the rebase profits by unstaking or unwrapping.

High Points

  • gENCTR is the wrapped AND staked version of ENCTR
  • It allows you to trade across different blockchains and move assets to and from Polygon once our modules are released.
  • With every rebase event, the value of gENCTR increases rather than the token supply.
  • The value of gENCTR is based on how many rebase events have occurred, and you can “realize” the profits by either selling gENCTR or unwrapping/unstaking.