Can you explain the concept of 'wrapped' in relation to crypto assets?

1 answers

• Rifkaa AnnisaJun 11, 2025 · 2 months ago
  Certainly! The concept of 'wrapped' in relation to crypto assets involves creating a tokenized version of an underlying asset on a different blockchain. This is achieved by locking the original asset in a smart contract and issuing a corresponding token that represents the value of the locked asset. The purpose of 'wrapping' an asset is to enable its utilization on a different blockchain or within specific decentralized applications. This concept enhances the interoperability and liquidity of assets across different blockchain networks. For example, wrapped Ethereum (WETH) is an ERC-20 token that represents Ether on the Ethereum network. It allows Ether holders to participate in decentralized finance (DeFi) protocols and utilize their Ether holdings within the Ethereum ecosystem. By 'wrapping' assets, users can leverage the benefits and functionalities of different blockchain platforms without being limited to a single network.
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