Wrapped Crypto Token

What are Wrapped Crypto Tokens?

Wrapped crypto tokens are cryptocurrencies linked to the value of another original coin or assets like gold, equities, shares, and real estate.

A newly minted token is issued to conduct transactions on other platforms, and the old asset is "wrapped" into a digital vault. Wrapped tokens create bridges across networks, enable interoperability in the cryptocurrency industry, and enable the usage of non-native assets on any blockchain.

They can stand in for anything, including fiat money, real estate, equity, stocks, commodities, arts and collectibles, and crypto assets. A custodian entity that will wrap and unwrap the asset must be considered and in charge of wrapped tokens.

The first wrapped Bitcoin tokens, called wBTC, were deployed in smart contracts on the Ethereum network to enable investors to receive a fixed income. The list also includes Binance Smart Chain BEP-20 and Ethereum ERC-20.