Here’s Why Wrapped Tokens Are Necessary!

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Wrapped tokens address a long-standing issue that exists in both traditional and cryptocurrency markets; the issue of cryptocurrencies having no interoperability. Let's discuss the need and nature of these specific tokens.

A token is basically "burnt" when it is unwrapped since the underlying asset is eliminated. z. Let's go a bit more into the various sorts of wrapped tokens based on their design and the blockchains they support before we examine some well-known instances of wrapped tokens.

The industry is struggling to get multiple blockchains to work together. One issue is that as more blockchains are created, the number of bridges needed to ensure that assets on one blockchain can easily transfer to all other blockchains grows exponentially.

The goal is to find ways to bridge assets between blockchains more effectively and easily. A bridge hub, often known as a core bridge to which all other blockchain bridges connect, is one approach to do this. Darwinia, a cross-chain bridge hub being created on Substrate, is one example of this.
At the very least, bridges and wrapped tokens will likely be a key component of the interoperability solution for the foreseeable future.