What Is a Wrapped Token?

Adekunle Joshua

– Tokens are often "wrapped" to make them compatible with different blockchains or environments where they're not native

Wrapped tokens, like WBTC, are backed by native assets and play a key role in cross-chain interoperability and DeFi

Wrapped tokens unlock access to diverse blockchain features, allowing assets from one chain to be used on another

They can represent a wide range of assets, from cryptocurrencies to stablecoins and even NFTs, depending on the use case

Wrapped Bitcoin (wBTC) on Ethereum is a prime example. It bridges Bitcoin to Ethereum DeFi and DEXs, preserving BTC's core value