MaxiDAO has announced via a Tweet and a Medium post that they are launching their WXCH product, or Wrapped Chia. I have to admit I am not 100% what to think of this. Experienced crypto traders in the Chia ecosystem seem to be excited about this, but I have some trouble seeing why I would want to use it personally. Of course I am far from an experienced crypto trader, so I welcome any explanation by someone that uses wrapped coins.
What is WXCH? It is an ERC20 token on the Ethereum blockchain that will be backed (mostly) 1:1 with XCH. You will ‘buy’ WXCH from a liquidity pool that you will then be able to swap on Ethereum with other tokens and take part in that marketplace. When you are finished you will ‘burn’ your WXCH tokens to get (most of) your XCH back.
For people itching to start trading their XCH in the wider crypto markets this will probably be a welcome addition since the friction is significantly lower than selling XCH on an exchange, buying Ether or an ERC20 token there, moving it around and then reversing that process when you want to return to XCH. It also avoids the risk that XCH will explode in price while you have your money in the markets, if that is something that worries you.
This one seems to be endorsed by Chia Network, so I assume they have looked over it and confirmed it does what it says it does, but like any automated financial service I will definitely not be in the first people to try it out. Especially with the 0.5% fee on every transaction, both ways.