Wrapped Token
A token on one blockchain that represents an asset from another blockchain, maintaining a 1:1 peg.
In-Depth Explanation
Wrapped tokens enable cross-chain asset usage. WBTC (Wrapped Bitcoin) lets you use Bitcoin value in Ethereum DeFi—BTC is locked with a custodian, and WBTC is minted on Ethereum. Trust depends on the wrapping mechanism: custodial (WBTC), decentralized (tBTC), or bridge-based. Wrapping introduces counterparty and smart contract risk.
Related Terms
Bridge
A protocol that enables transferring assets or data between different blockchains.
Cross-Chain
Interactions, transactions, or asset transfers between different blockchain networks.
Bitcoin
BTCThe first and largest cryptocurrency, created by Satoshi Nakamoto in 2009 as a peer-to-peer electronic cash system.
More in Infrastructure
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Transaction fees paid to validators/miners for executing operations on a blockchain.
Gwei
A denomination of Ether equal to one billionth of an ETH, commonly used to express gas prices.
Layer 2
L2Scaling solutions built on top of a base blockchain (L1) that process transactions off-chain while inheriting L1 security.
Layer 1
L1The base blockchain that provides security and consensus, such as Ethereum, Bitcoin, or Solana.