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Wrapped Token

What is a wrapped token?

A tokenized representation of an asset from another chain or context. WBTC is Bitcoin wrapped on Ethereum; wETH is ETH wrapped as an ERC-20. Adds a redemption trust assumption: the wrapped token is only as good as the custodian or bridge holding the underlying asset. WBTC's custodian change controversy (2024) illustrated how wrapper governance can become a risk in itself.

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