What Is Wrapped Token?

A wrapped token is a cryptocurrency pegged 1:1 to another asset but issued on a different blockchain. WBTC (Wrapped Bitcoin on Ethereum) and WETH (Wrapped Ether) are common examples. Wrapping allows tokens to be used in DeFi ecosystems on chains where the native asset does not exist. Large wrapping and unwrapping transactions by whales are tracked on Sonar Tracker and can indicate cross-chain capital flows. A surge in WBTC minting, for example, suggests Bitcoin holders are moving capital into Ethereum DeFi.