# Wrapped Token

*Crypto & Digital Assets — Finicade finance glossary*

A wrapped token represents an asset from one chain on another, backed one-to-one by the original held in custody. It's what lets Bitcoin be used in Ethereum DeFi. The wrapper introduces exactly the counterparty risk crypto claims to remove: the token is only worth the underlying if whoever holds the reserve is honest and solvent.

**Also known as:** wBTC, wrapped bitcoin, wrapped asset

**Related terms:** [Bridge](https://finicade.com/glossary/bridge), [DeFi](https://finicade.com/glossary/defi), [Layer 2](https://finicade.com/glossary/layer-2), [Smart Contract](https://finicade.com/glossary/smart-contract), [Counterparty Risk](https://finicade.com/glossary/counterparty-risk)

Source: https://finicade.com/glossary/wrapped-token