A wrapped token is a blockchain token that represents another asset. The original asset may be locked somewhere while a matching token is issued on another chain or protocol.
Why wrapped tokens exist
Blockchains have different systems. Wrapped tokens make it possible to use an asset in places where it would not normally work, such as using a Bitcoin-backed token inside an Ethereum DeFi app.
What users should check
A wrapped token depends on the issuer, bridge, contract, or custody setup behind it. If that backing fails, the wrapped token may not behave like the original asset.
Wrapped tokens are useful, but they add another layer of trust and technical risk compared with holding the native asset directly.