Wrapped Tokens – What They Are and Why They Matter
When working with Wrapped Tokens, digital assets that represent another blockchain’s token on a different network. Also known as wrapped assets, they let you move value across chains without selling.
Behind every wrapped token is a process called Token Wrapping, locking the original asset in a smart contract and issuing a new representation on another chain. This requires a Cross‑Chain Bridge, a set of smart contracts and validators that verify lock‑up and mint actions. Most bridges issue assets that follow the ERC‑20, the Ethereum token standard that defines how tokens behave and interact. Because ERC‑20 is widely supported, wrapped tokens can be traded, staked, or used in DeFi apps just like any native Ethereum token.
Real‑World Examples and Practical Uses
A clear illustration is Wrapped Chiliz (WCHZ), an ERC‑20 version of the Chiliz fan token that lets sports enthusiasts use Chiliz on Ethereum‑based platforms. WCHZ shows how token wrapping opens new markets: fans can earn rewards in DeFi, trade on DEXes, and participate in governance without leaving their favorite ecosystem. Similarly, Wrapped Bitcoin (WBTC) and Wrapped Ether (WETH) have become staples for liquidity providers, enabling Bitcoin holders to lend on Ethereum while retaining price exposure. wrapped tokens also appear in airdrop campaigns; projects distribute wrapped versions of popular assets to lower entry barriers and boost participation across chains. The combination of token wrapping, ERC‑20 compatibility, and cross‑chain bridges creates a toolkit that fuels liquidity, reduces friction, and expands the reach of virtually any cryptocurrency.
Below you’ll find a curated set of articles that break down the technology, walk through real‑world examples like WCHZ, compare different bridge solutions, and explore the risks and opportunities of using wrapped assets in trading, staking, and airdrop strategies. Dive in to see how wrapped tokens can fit into your own portfolio and trading plan.
Understanding Cross-Chain Bridges: How Crypto Moves Across Blockchains
Learn how cross-chain bridges connect blockchains, enable asset transfers, and the differences between trusted and trustless solutions, with real use cases and security tips.
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