Wrapped Token
a.k.a. Wrapped coin, WBTC, WETH
A token on one blockchain that stands in for a coin from another chain, backed one-to-one by the original held in reserve.
A wrapped token is a stand-in. Bitcoin can't run on Ethereum, so to use bitcoin in Ethereum's DeFi apps, someone locks real BTC with a custodian or a smart contract and issues an equal amount of "wrapped bitcoin" (WBTC) on Ethereum. Unwrap it and you get the original back.
Even ether gets wrapped into WETH so it follows the same token standard as everything else on Ethereum. The catch: a wrapped token is only as good as whatever holds the originals. If that custodian or bridge is hacked or dishonest, the wrapper can be left backed by nothing.
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