What are wrapped tokens?
The use of cryptocurrencies is not limited to their native blockchain, for example, you can apply bitcoin to the #Ethereum network, trading on #DEX or earning in #DeFi .
Wrapped tokens are the technology of issuing a copy of a cryptocurrency on another blockchain. The most famous such token is Wrapped #Bitcoin (WBTC), which allows the value of bitcoin to be transferred to the Ethereum network.
Wrapped Bitcoin works as follows: you send bitcoin to a special address (in a vault), and a smart contract in the ETH network issues and sends WBTC to your wallet. To get your #BTC back, you need to return the WBTC. You can sell the wrapped token and then the right to the original asset will pass to the buyer đ€
Wrapped tokens are issued in 1:1 ratio, their price should be equal to the value of the original asset. But due to issues with the protocol, blockchain, or just the market, this peg can break.
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