WSDA: The ERC-20 Version of SDA for DeFi and Cross-Chain Ecosystem

atos007
Feb. 11, 2025
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What do you think about WSDA's use in the Sidra ecosystem?

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  • Started by atos007 on Feb. 11, 2025.
Very useful for DEX and DeFi
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Useful, but needs more integrations
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Not very useful, better to use SDA directly
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Not sure / Need to learn more
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    Members 37 posts
    Feb. 11, 2025, 12:19 a.m.
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    WSDA: The ERC-20 Version of SDA for DeFi and Cross-Chain Ecosystem

    What is WSDA?

    WSDA is an ERC-20 token that represents Sidra Digital Asset (SDA) within the DeFi, DEX, and cross-chain ecosystem. With WSDA, SDA can be used on platforms that support the ERC-20 standard, such as Sidra DEX and other DeFi applications.

    Conversion Mechanism: SDA to WSDA

    The conversion from SDA to WSDA is facilitated through the WSDA smart contract, which acts as a bridge to lock SDA and issue WSDA.

    1. Users send SDA to the WSDA smart contract.
    2. The smart contract locks the SDA within the contract.
    3. WSDA is issued in an equivalent amount to the locked SDA.
    4. Users receive WSDA in their wallets and can use it for trading on Sidra DEX or other DeFi applications.

    Since each WSDA is backed by locked SDA, its value remains pegged 1:1 with SDA.

    Unwrapping WSDA to SDA (Not Yet Available)

    While WSDA can be minted from SDA through the smart contract, currently, there is no official application or feature that allows users to unwrap WSDA back into SDA.

    However, based on WSDA ABI code, the smart contract includes functions that could potentially be used for unwrapping:
    - withdraw(uint256 wad): This function might be used to withdraw SDA after burning WSDA.
    - Deposit and Withdrawal Events: These events indicate deposit (minting WSDA) and withdrawal (burning WSDA to reclaim SDA).

    If an unwrapping feature is developed in the future, the process might work as follows:

    1. Users send WSDA to the WSDA smart contract for burning.
    2. The smart contract removes WSDA from circulation.
    3. The previously locked SDA is released back to the user’s wallet.

    Until this feature is available, users can only use WSDA within the Sidra ecosystem without an option to convert it back into SDA.

    WSDA Cross-Chain Process and Involved Smart Contracts

    To enable WSDA’s usability across multiple blockchains, a cross-chain bridge is needed to facilitate asset transfers between Sidra Chain and other networks such as Ethereum, BSC, or Polygon.

    Possible cross-chain process:
    1. SDA is locked within a bridge smart contract on Sidra Chain.
    2. WSDA is issued on the target network in an equivalent amount.
    3. To revert back to SDA, users burn WSDA on the target network, and the bridge smart contract releases SDA on Sidra Chain.

    Smart contracts required for this process:
    - WSDA Smart Contract: Manages WSDA issuance and burning.
    - Cross-Chain Bridge Contract: Handles locking and releasing SDA during cross-chain transfers.
    - DEX Smart Contract: Supports WSDA trading on various DEXs, including Sidra DEX.

    WSDA in the Sidra Ecosystem

    WSDA has several use cases within the Sidra ecosystem, including:

    1. Sidra DEX: WSDA serves as the main token for trading on Sidra DEX.
    2. Other DeFi Applications: WSDA can be integrated with various platforms that support ERC-20 tokens.

    However, for contributions to SidraStart, users must use SDA, not WSDA. This is because SidraStart only accepts contributions in SDA, which are then locked and counted within the project's equity distribution system.

    Conclusion

    WSDA is the ERC-20 version of SDA designed to extend SDA’s usability in DeFi, DEX, and cross-chain applications. However, the unwrapping process from WSDA to SDA is currently unavailable, meaning users can only use WSDA within the Sidra ecosystem without an option to convert it back into SDA.

    Additionally, SidraStart does not accept WSDA for project contributions—only SDA is considered a valid contribution. If an unwrapping feature is developed in the future, users will be able to convert WSDA back to SDA by burning WSDA and retrieving the locked SDA from the smart contract.