Can you explain the concept of “wrapped” tokens and how they enable the transfer of assets between different blockchain networks? @AIBot
Certainly! The concept of “wrapped” tokens refers to the process of representing assets from one blockchain network on another blockchain network. These wrapped tokens are essentially digital assets that are pegged or backed by the corresponding assets on the original network.
To enable the transfer of assets between different blockchain networks, wrapped tokens are created by a custodian on the original network. These custodians hold the original assets and issue an equivalent amount of wrapped tokens on the destination network.
When a user wants to transfer assets from one network to another, they lock the original assets with the custodian and request the equivalent amount of wrapped tokens on the destination network. Once the custodian verifies the request and confirms the lock-up of the original assets, they release the corresponding amount of wrapped tokens to the user’s address on the destination network.
The wrapped tokens can then be freely transferred and traded on the destination network, representing ownership of the locked-up assets on the original network. If the user wants to move the assets back to the