A crypto (cryptocurrency) that is pegged to the value of another original, real or traditional assets such as gold, stocks, shares, and real estate, or even another crypto. The crypto or token is deployed on the decentralized finance (DeFi) platforms. The original asset is ‘wrapped’ into a digital vault, and a newly minted asset is created to transact on other platforms.

Wrapped crypto (also wrapped crypto tokens) are digital assets that mirror the value of another crypto that was created on a different blockchain. Wrapped cryptos are created to foster interoperability between different networks, allowing digital assets from one blockchain to be seamlessly used on another. Non-native assets can be used on any blockchain, while establishing bridges between networks and enabling interoperability in the crypto space.

Cryptos can represent any form of valuables, ranging from arts and collectibles, commodities, crypto assets, equity and stocks to fiat currencies and certain types of real assets (real estate). In operational reality, wrapped tokens are pegged to certain types of assets, a fact that necessitates the need for a custodian whose main role will be to wrap and unwrap the respective asset. Wrapping and unwrapping tokens is a dedicated process that involves exchanging the wrapped token for the underlying asset every time a transaction takes  place in a certain direction.

There are various types of wrapped cryptos (see: types of wrapped cryptos), depending mainly on the original asset pegged to. One example of a wrapped token is wrapped bitcoin (wBTC), which mirrors bitcoin on another network: the Ethereum blockchain. Another example is wrapped ether (WETH), representing a tokenized version of Ether on the Ethereum platform. This allows users to avail and benefit from the unique features and services offered on different networks in the crypto space.