Wrapped Crypto Tokens, Explained

Wrapped Crypto Tokens, Explained

Because is the biggest DeFi ecosystem, wrapped tokens are often those hosted on other blockchains but are also stablecoins that are pegged to the dollar.
Many of the first wrapped assets were, in fact, fiat-backed stablecoins, such as tokens with prices pegged to the dollar — Tether, Coinbase’s USDC or TrueUSD. There are also euro, yen, yuan and countless other fiat stablecoins that are mostly based on the blockchain. 
These are backed accordingly via the reserves, with coins fed in according to the demand of online  exchanges and larger institutional investors who want to quickly exchange fiat money into crypto and manage their money within a given platform. 
This makes it as easy to deposit dollars into DeFi applications and blockchain wallets as it does to have a reliable counter currency providing traders relief from asset volatility. Other cryptocurrencies are beginning to launch wrapped versions of their tokens on in larger numbers, with interoperability a vital consideration for solutions that want to be taken seriously.

See also  BlackRock is looking to hire a blockchain VP with experience in crypto assets

Leave a Reply

Your email address will not be published. Required fields are marked *

Want to automate your crypto Trading?
Try this new trading Robot!

Your information will be validated and you will be automatically redirected to the trading robot advanced dashboard.