Wrapped Token
A tokenized representation of an asset on another chain, typically intended to be backed and redeemable 1:1.
A wrapped token represents an asset outside its native environment. Usually the original asset is locked with a custodian or bridge, and a corresponding token is minted on the destination chain.
Wrapped tokens inherit risks from the backing arrangement, bridge contracts, custodians, redemption process, and proof of reserves. A 1:1 peg depends on users believing redemption will work.
Related terms
3 linkedExplore connected entries beyond the alphabetical index.
Token
→A digital asset issued on an existing blockchain, often representing value, rights, access, or unique ownership.
Bridge
→Infrastructure that enables moving assets or messages across blockchains.
Smart Contract
→Programmatic rules executed by the blockchain to enforce agreements without intermediaries.
All terms and definitions may update as the Cryptionary improves.
