What is a wrapped token?
Wrapped tokens are basically tokenized versions of cryptocurrencies that are pegged to the value of the original crypto asset.
The difference between the original and the wrapped version is that the wrapped version can be used on a non-native network as opposed to the original token that can only be used on the native network.
Wrapped version of token help solves an innate issue of blockchain interoperability. Wrapped tokens provide greater interoperability between different blockchain and cryptocurrencies.
Furthermore, wrapped tokens can also help to improve capital efficiency and liquidity on other blockchains. For instance, users can retain Ethereum exposure while participate in yield farming opportunities on the Solana network.
Almost every other major blockchain has a wrapped version of its native cryptocurrency, for instance, Wrapped Bitcoin (wBTC), Wrapped CRO (wCRO) and many more.