(JaiChai) Musings of the Day — No Such Thing as a Free Lunch…
Fact: I’m no spring chicken.
I’ve been in the crypto space longer than most.
I bought my first Bitcoin at ~$103 and can still remember when M.K. was at Mt. Gox, C.H. was at Ethereum and J.M. was at Ripple.
Given the above, it’s up to you to discount the following mind emesis (brain vomit) as the rantings of an old tongue that loves to wag or to heed the advice from an OG (positive connotation, please) who’s “Been There, Done That”.
[Still with me? Good. Then we shall charge on.]
As a producer and consumer of innovative crypto products like DeFi, NFTs, ERC vs BEP vs TRC vs pick your platform or standard, etc….nothing is simple.
For example, the overwhelming majority of DeFi and top NFT marketplaces are ETH based.
And yet, ETH is NOT an ERC20 compatible token.
Enter “Wrapped Tokens” and the beginning of the Wrap, Wrap, Wrap Craze.
You now can find WETH, WBTC, W — pick your token or platform almost everywhere.
They are now as ubiquitous as exchange tokens and other specialized “HOUSE TOKENS” for discounted transaction fees or staking.
Wrapped tokens are versatile little buggers.
They play nice (meaning, are compatible) with anything or anyone else in the DeFi and NFT world; quickly jumping (i.e., fast tx times) to and fro AND have smaller tx fees than their mirror image, genuine crypto coin (.g., WETH — ETH).
BUT…and there’s always a nasty smelling butt, no?
The Wrapping and Unwrapping process has conversion fees and requires a custodian (aka “Trusted Third Party”).
Now wait just a minute!
Getting rid of “Trusted Third Parties”, aka greedy middlemen, is why crypto was invented in the first place!
So, although you may be pleased with how Wrapped Coins transact without hitches, have fast transactions and “seem” cheaper to use, never forget that when you need to convert them (Unwrap) to play in the “real crypto world of genuine coins”, a fee is required and they are inherently CENTRALIZED.
That means, similar to crypto exchanges “mysteriously” going down or outright stopping trading on a certain coin, custodians of wrapped coins can easily shut down operations whenever a profit can’t be made.
Yes, my friends, nothing in the crypto world is simple except for these two things:
[Many will roll their eyes when I repeat this mantra.]
Before plunking down a penny for a crypto service or product, DYOR , DYOR, and DYOR!
And when you get RBO — “Research Burn Out”, take a breather. Then come back and do at least one more DYOR!
ASS-uming you have met whatever arbitrary minimum or max restrictions are enforced by “THE HOUSE” (platform, wallet or exchange), everytime you touch your crypto; that is, swap, transfer, withdraw, convert etc., THE HOUSE MUST ALWAYS GET PAID.
Otherwise, your crypto product or service would not exist. Period.
As the post title states, there’s “No Such Thing as a Free Lunch.”
Submitted for you to ponder in a quiet place.
May you and yours be well and loving life today.
In Lak’ech, JaiChai
(JaiChai 15 Sep 2022. Simultaneous multi-site submissions posted. All rights reserved.)
Originally published at https://steemit.com on September 15, 2022.