What Is Wrapped token?

A wrapped token is a token that represents an equivalent amount of a native cryptocurrency from another blockchain, enabling assets to be used on non-native chains. Examples include WBTC (Wrapped Bitcoin on Ethereum) and WETH (Wrapped Ether), which maintain a 1:1 ratio with their underlying assets through custodians or smart contracts. Wrapped tokens are ERC-20 compatible and increase cross-chain utility and liquidity by allowing assets to participate in decentralised finance applications on chains where they are not natively available.

See also

• Token

• ERC-20

• Bridge

• Decentralised finance

• Smart contract