What is the point of wrapped tokens?

Wrapped tokens play a pivotal role in enhancing blockchain interoperability, a concept that aims to bridge the gap between various blockchain networks. By doing so, they facilitate the seamless transfer and utilization of digital assets across different ecosystems.

The primary motivation behind wrapped tokens is to empower users with the ability to harness the potential of assets residing on one blockchain within the context of another blockchain's applications. This includes decentralized finance (DeFi) platforms and other innovative blockchain features.

With wrapped tokens, users can unlock new opportunities for value exchange and financial services, transcending the limitations of individual blockchain networks. They can, for instance, use tokens issued on one blockchain as collateral for loans or participate in trading pairs on decentralized exchanges built on another blockchain.

The process of wrapping involves locking the original asset on its native blockchain and minting an equivalent representation on another blockchain. This representation, known as a wrapped token, mirrors the value and ownership of the original asset while adhering to the rules and standards of the new blockchain.

BTCC, a leading cryptocurrency exchange, offers a comprehensive suite of services that cater to the evolving needs of the blockchain industry. Among its offerings, BTCC provides users with access to spot and futures trading, enabling them to capitalize on market movements and hedge risks effectively.