SendPay Business
Smiling man in a suit in a modern office

What is a wrapped token? How Bitcoin is used on other blockchains

By SendPay Business · · 2 min read

Ask about this page:Ask ChatGPTAsk ClaudeAsk Perplexity
Money on its way
  1. Pick who to pay and type the amount
  2. Tap send and it is on its way
  3. It lands in their account

A wrapped token is a token on one blockchain that represents a coin from another blockchain, one for one. The best-known example is wrapped Bitcoin, which lets Bitcoin be used in apps built on Ethereum.

How wrapping works

  • The original coin, such as Bitcoin, is sent to a custodian or a smart contract.
  • It is locked up and held there.
  • An equal amount of the wrapped token is created on the other blockchain.
  • To unwrap, the wrapped token is destroyed and the original coin is released.
Man in a suit on the phone at a desk

Why people use them

Different blockchains cannot read each other directly. Wrapping lets a coin be used in DeFi apps, lending pools and exchanges on another chain. Wrapped ether is also used on Ethereum itself so that ether works like any other token in smart contracts.

Try it

Name your platform and watch it come to life

Type a name, tap a colour and pick what it does. The phone changes as you go.

Colour

What it does

Build mine

Design and preview your whole platform free, then launch when you are ready.

The risks

A wrapped token is only as good as whoever holds the original coins. If the custodian or the bridge is hacked or fails, the wrapped token may lose its backing. Several large crypto bridge hacks have shown this risk is real.

Four coworkers smiling around a laptop

Where SendPay fits

SendPay does not offer wrapping or bridging. A SendPay platform lets your customers buy, sell and hold crypto next to their cash, with assets held with regulated partners and a trading fee you set.

Woman in a blue shirt using a laptop

How it works

Your own money app
  1. Name it and pick your colours
  2. Choose what it does
  3. Launch when you are ready

Why sign up

Create your free SendPay account

It's all about creating your own financial platform with ease. Start with a free account today.

  • A free business accountOpen it in about a minute with your business name, email, password and mobile. No card and no documents to start.
  • Get paid from day oneTake card payments, and share your own payment link and invoices so customers pay in a click.
  • A free business websiteFree to build, free to publish and free to keep, with unlimited visits.
  • Your own financial platformDesign and preview your whole platform free, then launch when you are ready.
Create a free business account Create a free websiteStart building your platform

SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.

Questions people ask

What does an Ethereum transaction cost?

Work out the gas fee in ETH and your currency.

Ethereum gas fee calculator →
What is a crypto bridge?

How tokens move between blockchains.

Crypto bridges →
What is crypto custody?

Who holds the keys to your coins.

Crypto custody →
Can I launch my own crypto app?

Yes, with buy, sell and hold on a branded platform.

See platforms →

Read next

Spotted a mistake or something out of date? and we'll fix it. How our guides are made

This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.