What’s the Point of Wrapping Tokens?

A wrapped token is a version of a cryptocurrency that works on a different blockchain.
It’s like putting your coin in a “special box” so it can travel and be used somewhere else.

Example:

BTC only works on the Bitcoin network.
WBTC (Wrapped Bitcoin) is BTC packaged so it works on Ethereum.

Why Wrapping Exists

1. Cross-Chain Compatibility

Blockchains don’t talk to each other natively.
Wrapping lets you use assets from one chain on another.
Example: WBTC lets Bitcoin holders trade, lend, and borrow in Ethereum DeFi apps.

Instead of building new liquidity pools for every chain, wrapping allows you to bring existing value over.
Example: Wrapped SOL (wSOL) lets Solana’s native token be used in certain smart contracts and apps that only recognize SPL-compatible tokens.

3. More Utility for Idle Assets

Your BTC sitting on Bitcoin doesn’t earn yield.
Wrapped BTC on Ethereum can be staked, lent, or used in yield farms.

How Wrapping Works

Deposit Original Token
You send your real BTC/SOL/other token to a custodian or smart contract.
Mint Wrapped Token
The system issues an equal amount of wrapped tokens on the new chain.
Redeem Anytime
Send the wrapped token back to get your original coin released.

Always 1:1 backed.
If there’s 100 WBTC in existence, there’s 100 BTC locked in custody.

Risks of Wrapped Tokens

Custodian Risk → If the custodian or bridge gets hacked, the wrapped token could lose value.
Bridge Exploits → Many of the biggest DeFi hacks were cross-chain bridge attacks.
Not Truly “Your Keys” → Wrapping often means trusting an intermediary.

Conclusion: Wrapped Tokens = Cross-Chain Passports

Wrapped tokens are basically passports for your crypto.
They let assets travel to other blockchains and do things they couldn’t in their home chain.

Without them, DeFi liquidity would be fragmented and far smaller.
With them, you can make your BTC work like ETH — but remember: every passport has a border checkpoint, and that’s where the risk lies.

For More Info related to Mitosis please follow official links below

Mitosis Website : https://mitosis.org/

Mitosis Expedition : https://expedition.mitosis.org/

Mitosis Docs : https://docs.mitosis.org