A wrapped token is a version of a cryptocurrency that exists on a different blockchain than the original. It’s created to let users move assets between otherwise incompatible networks. For example, you can’t normally use Bitcoin on Ethereum—but with Wrapped Bitcoin (WBTC), you can. It’s a 1:1 representation of BTC on the Ethereum blockchain.
Wrapped tokens make blockchains more connected. They let you use assets like Bitcoin in Ethereum-based DeFi apps, increasing liquidity and unlocking new use cases across platforms. To keep the wrapped token’s value secure, the original asset is held in reserve—usually by a trusted custodian—while the wrapped version is issued for use on another chain.
