What is the meaning of 'wrapped' in the context of cryptocurrency?

3 answers

• TetraAug 07, 2023 · 2 years ago
  In the context of cryptocurrency, the term 'wrapped' refers to the process of creating a tokenized version of an asset on a blockchain. This allows users to trade and interact with assets that are not native to the blockchain. For example, 'wrapped Bitcoin' (WBTC) is a tokenized version of Bitcoin that can be used on Ethereum-based decentralized applications. The process of wrapping involves locking the original asset in a smart contract and issuing a corresponding token that represents ownership of the asset. This token can then be freely traded and used within the blockchain ecosystem.
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• František HorváthJan 02, 2022 · 4 years ago
  When we talk about 'wrapped' in the context of cryptocurrency, it means that a real-world asset is being represented as a token on a blockchain. This tokenization process allows for easier transfer and trading of the asset within the cryptocurrency ecosystem. It's like putting a wrapper around the asset, making it compatible with the blockchain technology. 'Wrapped' tokens are often used to bridge different blockchain networks, enabling cross-chain interoperability and expanding the utility of the underlying asset.
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• San AOct 29, 2023 · 2 years ago
  Wrapped tokens in the context of cryptocurrency are essentially representations of real-world assets on a blockchain. These tokens are backed by the actual assets they represent, which are held in custody by a trusted third party. The wrapping process involves locking the asset in a smart contract and issuing a corresponding token on the blockchain. This token can then be freely traded and used within the cryptocurrency ecosystem. By creating wrapped versions of assets, users can benefit from the advantages of blockchain technology, such as faster transactions and increased liquidity, while still maintaining exposure to traditional assets.
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