Wrapped Token

A token on one chain that represents an asset held on another.

Blockchain Technology Also called wrapped bitcoin, WBTC, wrapped

Wrapping issues a one-to-one claim on a locked reserve. Wrapped bitcoin on Ethereum, for example, is an ERC-20 token backed by BTC held by a custodian, so bitcoin holders can use DeFi without selling.

The wrapped version is only as sound as whoever holds the reserve and whatever contract governs redemption.

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