Wrapped Token
Also known as: Tokenized Asset, Cross-Chain Token, Wrapped Crypto
A crypto token that represents another asset on a different blockchain, allowing cross-chain interoperability.
A wrapped token is a blockchain token that mirrors the value of another cryptocurrency, typically on a different chain. It enables assets like Bitcoin to be used on Ethereum or other networks through smart contracts and custodial systems. Wrapped tokens maintain a 1:1 peg with the original asset and are redeemable. For example, Wrapped Bitcoin (WBTC) allows BTC to interact with Ethereum-based DeFi protocols. Wrapping helps bridge liquidity across chains, but depends on trust in the wrapping mechanism—whether it's custodial or decentralized.