Wrapped token
A wrapped token is a stand-in: it represents another asset in a format a particular blockchain or app can use, while the original is held somewhere else.
Photo: “Pile colorful wrapped gift boxes” by Unknown, CC0 1.0, via Rawpixel (edited: cropped and resized).
A wrapped token represents another asset in a different format or on a different network. The original is locked by a smart contract and an equal amount of the wrapped token is minted [1]. Wrapped ether (WETH), for example, is ETH in ERC-20 token form, redeemable one-for-one [2].
Key points
- 1Wrapping locks the original asset and issues an equal amount of a token that follows another standard.
- 2WETH exists because ETH predates the ERC-20 token standard that most Ethereum apps use.
- 3A wrapped token is only as good as the contract, bridge or custodian holding the original.
How does wrapping work?#
Most tokens on Ethereum follow a common rulebook called ERC-20, so apps can handle them all the same way. ETH itself was created before that standard and does not follow it [2]. Wrapped ether solves the mismatch: you deposit ETH into the WETH smart contract and receive the same amount of WETH, an ERC-20 token. To unwrap, you send WETH back; it is burned and you get the same amount of ETH [2].
| Step | Value |
|---|---|
| Deposit into the WETH contract | 0.5 ETH |
| WETH you receive | 0.5 WETH |
| Later, WETH sent back to unwrap | 0.5 WETH (burned) |
| ETH you get back | 0.5 ETH |
| Gas fees | Paid in ETH for each step, on top of the amounts above |
Keep some unwrapped ETH: WETH cannot pay gas fees natively [2].
Is a wrapped token the same as the original?#
It tracks the original, but it is a separate asset with its own risks. ethereum.org gives wrapped bitcoin (WBTC) as an example: it is a token native to Ethereum, an Ethereum version of bitcoin, not the original asset on the Bitcoin blockchain. To hold real BTC again you have to bridge back [3]. How safe a wrapped token is depends on who or what holds the original.
Which words are related?#
- Smart contract — the program that holds the original and issues the wrapped token.
- Stablecoin — another token designed to track an outside value.
- Layer 2 rollups explained — where bridged versions of ETH and tokens are common.
- Gas — still paid in ETH, even when you hold WETH.
Frequently asked questions#
Does it cost anything to wrap ETH?
You pay a normal gas fee to wrap or unwrap through the WETH contract [2].
Is WETH safe?
ethereum.org calls the canonical WETH contract generally secure because it is simple, battle-tested and formally verified [2]. That says nothing about look-alike tokens using the same name.
Why do liquid staking tokens have wrapped versions?
Some staking tokens change balance as rewards accrue, which many apps cannot handle, so they offer a non-rebasing wrapped version [4].
Sources#
Grade A = primary source (regulator, protocol specification, client code, original author). Grade B = expert secondary source used for explanation only.
- Aethereum.org. Ethereum glossary, 2026.
- Aethereum.org. What is Wrapped Ether (WETH), 2026.
- Aethereum.org. Introduction to blockchain bridges, 2026.
- Aethereum.org. Liquid & pooled staking, 2026.