What Are Wrapped Tokens?

Have you tried to exchange tokens from one cryptocurrency to another and you are looking for a convenient way of utilizing a single crypto to a variety of blockchains? If so, you have often heard about the “Wrapped Tokens” or maybe not. Well, let me introduce you first to what is actually wrapped tokens. So, it is the form of digital tokens that wrap your tokens to utilize them on different blockchain platforms like you can use Bitcoin on the Ethereum blockchain. To know more about wrapped tokens read the complete lesson. Today, in this article we will discuss a detailed discussion in it so, without wasting more time let's get started!

What Are Wrapped Tokens? 

Wrapped tokens are the form of digital tokens that facilitate the users to utilize the tokens on a different blockchain. For instance, you have ETH tokens which are the native token of the Ethereum blockchain but you want to utilize them on the blockchain where only the BTC is acceptable. So, here you can only utilize ETH on that blockchain by using the wrapped tokens (WETH). Wrapped token helps you to use variety of tokens on a single platform of blockchain or without leaving the blockchain ecosystem so in that way you don’t need to swap the tokens, again and again, to utilize them on a different blockchain as well as no need to leave any specific blockchain.

Wrapped tokens provide a variety of benefits to the users of cryptocurrencies as well as crypto statistics such as increased accessibility, interoperability, liquidity, security, and decreased transaction cost. Let’s discuss all of the benefits one by one:

  1. Accessibility: You can easily access the different blockchains by utilizing the token of another blockchain such as you can utilize the ETH as WETH on the Bitcoin blockchain.
  2. Interoperability: Wrapped tokens work as a bridge between the different tokens with the help of a smart contract and it improves the interoperability of different blockchains.
  3. Liquidity: The use of wrapped tokens increases the liquidity of each token on a variety of blockchains. When all the tokens used by every single blockchain means each token is available on every blockchain.
  4. Decrease Transaction Cost:  Wrapped tokens eliminate the use of cryptocurrency exchanges which means you don’t need to exchange any tokens to utilize them on the desired blockchain. Here with the help of wrapped tokens, you can directly use any tokens on any blockchain ecosystem without exchanging them.


Wrapped tokens are digital tokens that help users to utilize any tokens on any blockchain without the exchange of tokens. This means you can access any blockchain by using any specific tokens like you can utilize bitcoin (BTC) as WBTC on the Ethereum blockchain. Wrapped tokens increase blockchain accessibility, interoperability, and token liquidity. It eliminates the concept of token exchanging which helps to decrease the transaction cost.

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