As we fast track towards the cryptocurrency space with the wQOIN we want to help educate our community on the basics of cryptocurrency.
Arming yourself with industry knowledge will assist you in holding a reasonable ‘crypto-conversation’ going forward.
So, what exactly is a wrapped token?
At its core, a wrapped token is a blockchain token pegged to the value of an asset like gold or real estate for example.
It’s called a wrapped token because the original asset is put in a wrapper, a kind of digital vault that allows the wrapped version to be created on another blockchain.
Different blockchains provide different functionality. And they can’t talk to each other. The Bitcoin blockchain doesn’t know what’s happening on the Ethereum blockchain. However, with wrapped tokens, there can be more bridges between different blockchains.
Wrapped token holders can also reinvest their profits and benefit from compounding returns.