# Wrapped Token

> A token on one blockchain that represents a coin from another. Lets you use Bitcoin on Ethereum, for example.

Canonical URL: https://business.fudfomo.co/glossary/wrapped-token
Source: What The Block! Dictionary v1.0 (last updated 2026-04-25), browsable at https://wtb.fudfomo.co.

## Definition

A wrapped token is a token on one blockchain backed one-for-one by an asset held on another. Wrapped Bitcoin (WBTC) is the best-known example: each WBTC on Ethereum is backed by one bitcoin held by a custodian.

Wrapping lets you use an asset inside a different blockchain's ecosystem, for example to trade Bitcoin on a DEX or to use it as collateral in a DeFi app. The trade-off is that you depend on the custodian or bridge that holds the original.

## Related terms

- [Bridge](https://business.fudfomo.co/glossary/bridge): A tool that lets you move tokens from one blockchain to another.
- [Token](https://business.fudfomo.co/glossary/token): A unit of value created on top of an existing blockchain like Ethereum.
- [DeFi](https://business.fudfomo.co/glossary/defi): Decentralised finance. Apps that offer lending, trading, and saving on a blockchain instead of through a bank.

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