Wrapped tokens

A wrapped token stands for another coin 1:1 on a different chain, like wrapped BTC on Ethereum.

What it means

A custodian or a smart contract holds the original coin as backing, so the wrapped token is only worth about the same as long as that backing is really there.

What to watch

Who or what holds the backing, whether the reserve can be checked, and how close the wrapped token trades to the original coin.

How Compass-Alpha uses it

Background only; not used in any figure on Compass-Alpha.