Wrapped Tokens: How Bridge Assets Work in Crypto

When working with Wrapped Tokens, tokens that represent an asset from another blockchain, allowing it to move and be used on a different chain. Also known as wrapped assets, they act as a bridge between isolated ecosystems and unlock liquidity that would otherwise sit idle.

One of the most common examples is Wrapped Bitcoin (WBTC), a Bitcoin‑backed ERC‑20 token on Ethereum that lets Bitcoin holders trade, lend and earn yield without leaving the Ethereum DeFi world. Similarly, Wrapped Ether (WETH), the ERC‑20 wrapper for native Ether, standardizes ETH for smart‑contract interactions. A newer entrant, Wrapped Mantle (WMNT), brings the Mantle network’s utility token into the Ethereum Layer‑2 ecosystem, enabling governance and cross‑chain bridging. These three illustrate how the central concept of wrapped tokens encompasses cross‑chain representation, requires a trusted bridge mechanism, and influences liquidity across DeFi platforms.

Why Wrapped Tokens Matter for Traders and Developers

Wrapped tokens enable seamless asset transfer without exposing users to the security risks of moving native coins across chains. The bridge contracts lock the original asset, mint a corresponding wrapped version, and maintain a 1:1 peg. This model requires robust custodial solutions, transparent audits, and clear redemption pathways—key attributes that investors evaluate before locking value in a bridge. For developers, wrapped tokens provide a standard ERC‑20 interface, allowing existing DApps to accept Bitcoin, Mantle or other non‑Ethereum assets without rewriting core logic.

Beyond DeFi, wrapped tokens are gaining traction in NFT marketplaces, gaming platforms, and staking services. A gaming token originally issued on a high‑throughput chain can be wrapped for use on Ethereum, letting players tap into larger liquidity pools and secondary markets. Likewise, NFT creators can wrap their assets to sell on multiple chains, broadening audience reach. These real‑world use cases show how the concept relates to broader tokenomics strategies and cross‑chain interoperability goals.

Safety is a recurring theme across all wrapped‑token projects. Audits of bridge contracts, insurance funds for potential hacks, and governance voting on redemption rules are common safeguards. The market has seen high‑profile failures—when a bridge is compromised, the wrapped token loses its peg, causing rapid devaluation. Understanding the risk profile of each wrapped token, from WBTC’s institutional custodians to WMNT’s decentralized bridge validators, is essential before allocating capital.

Below you’ll find a curated collection of articles that dive deeper into specific wrapped tokens, bridge mechanics, and the latest market data. Whether you’re looking for a quick rundown of WBTC’s price dynamics, a technical breakdown of WMNT’s governance model, or a broader view of how wrapped assets shape the DeFi landscape, the posts ahead have you covered.

Cross-Chain Bridges Explained: How Crypto Interoperability Works
Selene Marwood 13 March 2025 20 Comments

Cross-Chain Bridges Explained: How Crypto Interoperability Works

Learn what cross-chain bridges are, how they lock‑mint assets, the difference between trusted and trustless options, top examples, benefits, security tips, and how to choose the right bridge.