Wrapped Token
A tokenised version of a cryptocurrency issued on a different blockchain, backed by the original asset held in custody by a bridge or issuer.
Also known as: WBTC, bridged token, synthetic token
Last reviewed: 10 June 2026
A wrapped token is a synthetic representation of a cryptocurrency on a blockchain other than its native one. For example, Wrapped Bitcoin (WBTC) is an ERC-20 token on Ethereum that is redeemable 1:1 for actual Bitcoin held by a custodian. Wrapping enables assets to be used in DeFi protocols that only support certain token standards.
Fraud and risk dimensions include: fake wrapped tokens that claim backing they do not have; de-pegging events when the custodian or bridge holding the underlying asset is hacked; and scam tokens that copy the name and symbol of a legitimate wrapped token but are entirely unrelated.
Before using a wrapped token in a DeFi context, consumers should verify the contract address against the official project documentation, understand who the custodian is and what audits or reserves exist for the backing, and be aware that a bridge hack can cause the wrapped token to lose its peg instantly.