What are Wrapped Tokens — and How do They Work?

Whenever you check out the crypto market, you encounter tokens that have the word “wrapped” in front of them, such as Wrapped Bitcoin (WBTC) or Wrapped Ether (WETH).

As their name suggests, such tokens are called wrapped tokens. 

Wrapped tokens are cryptocurrencies that are implemented in a different blockchain. The reason that wrapped tokens exist is for interoperability, which is the ability of a coin to work in a blockchain that normally does not support it.