What is Wrapped HBAR (WHBAR)?

About Wrapped HBAR

Wrapped HBAR (WHBAR) is a tokenized version of Hedera on Ethereum. It represents Hedera in a 1:1 ratio, where each WHBAR token is backed by an equal amount of Hedera held in reserve by custodians. The primary purpose of WHBAR is to enable Hedera holders to access the world of DeFi. Since Ethereum has become more popular in decentralized finance, a significant portion of DeFi applications, protocols, and services are built on its blockchain. By wrapping Hedera in an ERC-20 token format, it becomes compatible with the Ethereum network, opening up a multitude of possibilities for the holders.

Hedera is a public network that leverages the hashgraph consensus algorithm to enable fast, fair, and secure transactions. Unlike traditional blockchain technology, Hedera doesn't form a single chain of blocks but instead weaves all transactions into a single whole, ensuring that no data is discarded. This innovative approach allows Hedera to process hundreds of thousands of transactions per second, with consensus latency measured in seconds, making it one of the most efficient and scalable platforms in the distributed ledger space.

Hedera was founded in 2017 by American technologists Leemon Baird and Mance Harmon, who also launched Swirlds Labs. Both founders possess extensive experience in the software development and tech industry, with expertise spanning AI, security, defense, identity, and more. As of August 2023, the Hedera network processes 66,670,036 transactions per day, with an average transaction time of 5.64 seconds.

Resources

Whitepaper: https://hedera.com/hh_whitepaper_v2.1-20200815.pdf

Official website: https://hedera.com/

How Does Wrapped HBAR Work

Hedera leverages the hashgraph consensus algorithm to enable a decentralized network capable of processing hundreds of thousands of transactions per second. Unlike traditional blockchain, where blocks can be discarded, Hedera incorporates every container of transactions into the ledger, ensuring efficiency and fairness. The system's asynchronous Byzantine Fault Tolerance (aBFT) provides robust security, including resilience to Distributed Denial of Service (DDoS) attacks, and ensures fair access and ordering of transactions.

The governance of Hedera is overseen by a council of up to 39 leading global enterprises, reflecting a diverse range of industries and geographies. This decentralized governance structure ensures that no single member has control, and no small group can exert undue influence. Stability is further ensured through technical controls that validate the pedigree of the ledger and legal controls that prevent unauthorized forks, providing a stable platform for mainstream adoption.

Hedera also emphasizes regulatory compliance, with features like controlled mutability of the network state and the ability to attach additional data to transactions. These features enable compliance with regulations like GDPR and facilitate Know Your Customer (KYC) and Anti Money Laundering (AML) checks. While not open source, Hedera's code is publicly available for review, ensuring transparency and stability through the defensive use of hashgraph software patents.

Conclusion

Wrapped HBAR stands as a significant innovation, bridging Hedera's unique hashgraph technology with the thriving world of Ethereum's DeFi. By ensuring a 1:1 ratio and compatibility with the Ethereum network, WHBAR has unlocked new possibilities and enhanced interoperability in the blockchain space

It's important to note that like any other cryptocurrencies, Wrapped HBAR carries its own risks and it's always wise to do your own research and exercise caution while investing.