{
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  "schemaVersion": "1.0.0",
  "id": "wrapped-assets",
  "canonical": "https://degreesofsatoshi.com/encyclopedia/wrapped-assets/",
  "collection": "defi",
  "title": "Wrapped assets: an interface change or a separate backing claim",
  "description": "Compare native-asset wrappers, receipt wrappers and cross-chain representations, and see why a familiar ticker does not identify the backing mechanism.",
  "aliases": [
    "token wrapper"
  ],
  "dates": {
    "published": "2026-10-02",
    "modified": "2026-10-02",
    "verified": "2026-10-02T15:08:18.373Z",
    "dataAsOf": null
  },
  "authorship": {
    "publisher": "Degrees of Satoshi editorial project",
    "process": "AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied."
  },
  "quickAnswer": {
    "text": "A wrapped asset represents another asset through a token interface or backing arrangement. A simple ETH wrapper holds ETH and issues an ERC-20 balance; a cross-chain representation may depend on a bridge or custodian. The word wrapped does not guarantee a shared redemption mechanism or a one-to-one market price.",
    "claimId": "wrapped-assets-quick-answer",
    "sourceIds": [
      "weth",
      "bridges"
    ]
  },
  "keyFacts": [
    {
      "label": "WETH example",
      "value": "The reference wrapper credits deposits and returns ETH on withdrawal.",
      "sourceIds": [
        "weth"
      ],
      "id": "weth-example",
      "claimId": "wrapped-assets-fact-weth-example"
    },
    {
      "label": "Interface",
      "value": "An ERC-20 balance supports a common token API.",
      "sourceIds": [
        "erc20"
      ],
      "id": "interface",
      "claimId": "wrapped-assets-fact-interface"
    },
    {
      "label": "Receipt wrapper",
      "value": "wstETH represents stETH through a changing conversion rate.",
      "sourceIds": [
        "wsteth"
      ],
      "id": "receipt-wrapper",
      "claimId": "wrapped-assets-fact-receipt-wrapper"
    }
  ],
  "prerequisites": [
    "connecting-a-wallet"
  ],
  "sections": [
    {
      "id": "native-wrapper",
      "heading": "A wrapper can adapt an asset to a token interface",
      "paragraphs": [
        "ETH is Ethereum’s native asset and is not itself an ERC-20 contract balance. The WETH9 reference implementation accepts ETH deposits and credits a token balance. Withdrawing debits that balance and returns ETH under the contract’s rules.",
        "Ignoring transaction costs, depositing two ETH in that reference design credits two WETH units. That is a property of this implementation. It does not establish that every token bearing the WETH name uses the same contract or has the same backing."
      ],
      "sourceIds": [
        "weth",
        "erc20"
      ]
    },
    {
      "id": "receipt-wrapper",
      "heading": "Another wrapper can change the accounting display",
      "paragraphs": [
        "wstETH wraps stETH into a non-rebasing token balance. The amount of stETH represented by each wrapper unit changes with the underlying accounting. Unwrapping returns the claim token; it is not the same operation as completing a staking withdrawal into native ETH.",
        "An apparently static wallet quantity can therefore represent a changing quantity of the underlying receipt. When calculating a position, identify whether the number shown is wrapper units, underlying claim units or native assets."
      ],
      "sourceIds": [
        "wsteth"
      ]
    },
    {
      "id": "cross-chain",
      "heading": "A representation on another chain adds a verification step",
      "paragraphs": [
        "A bridge may hold an asset on one chain and issue a representation elsewhere. Returning to the original asset requires that bridge’s verification and redemption process. Other arrangements rely on custodians or different mechanisms.",
        "Identify the chain and contract, backing location, authorized minting power and exit route. A one-to-one unit convention is not proof that reserves remain available or that a market will trade at that ratio. Ticker equality is insufficient evidence of asset identity."
      ],
      "sourceIds": [
        "bridges"
      ]
    }
  ],
  "faq": [
    {
      "question": "Is unwrapping always the same as redeeming the original asset?",
      "answer": "No. Unwrapping a receipt wrapper can return another claim token. Reaching the original asset may still require a staking withdrawal, bridge operation or custodian process.",
      "sourceIds": [
        "wsteth",
        "bridges"
      ]
    }
  ],
  "claims": [
    {
      "id": "wrapped-assets-quick-answer",
      "articleSlug": "wrapped-assets",
      "statement": "A wrapped asset represents another asset through a token interface or backing arrangement. A simple ETH wrapper holds ETH and issues an ERC-20 balance; a cross-chain representation may depend on a bridge or custodian. The word wrapped does not guarantee a shared redemption mechanism or a one-to-one market price.",
      "sourceIds": [
        "source-012a4cc1dd651125",
        "source-707654935f40e45a"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-012a4cc1dd651125",
          "locator": "deposit; withdraw; balanceOf"
        },
        {
          "sourceId": "source-707654935f40e45a",
          "locator": "How do bridges work?; Bridge types; Risk with bridges"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": null,
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T15:08:18.373Z",
        "reviewer": "automated independent verification",
        "notes": [
          "Read the pinned WETH9 test/reference implementation deposit/withdraw, ERC-20 methods, wstETH wrap/unwrap and developer bridge models. The reference code is not misrepresented as proof of a particular live deployment.",
          "The receipt-wrapper example correctly ends with stETH, leaving ETH redemption separate. The QA does not generalize WETH mechanics, custody or one-to-one market pricing to every wrapped asset."
        ]
      }
    },
    {
      "id": "wrapped-assets-fact-weth-example",
      "articleSlug": "wrapped-assets",
      "statement": "WETH example: The reference wrapper credits deposits and returns ETH on withdrawal.",
      "sourceIds": [
        "source-012a4cc1dd651125"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-012a4cc1dd651125",
          "locator": "deposit; withdraw; balanceOf"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": null,
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T15:08:18.373Z",
        "reviewer": "automated independent verification",
        "notes": [
          "Read the pinned WETH9 test/reference implementation deposit/withdraw, ERC-20 methods, wstETH wrap/unwrap and developer bridge models. The reference code is not misrepresented as proof of a particular live deployment.",
          "The receipt-wrapper example correctly ends with stETH, leaving ETH redemption separate. The QA does not generalize WETH mechanics, custody or one-to-one market pricing to every wrapped asset."
        ]
      }
    },
    {
      "id": "wrapped-assets-fact-interface",
      "articleSlug": "wrapped-assets",
      "statement": "Interface: An ERC-20 balance supports a common token API.",
      "sourceIds": [
        "source-ac4ad503a55127bb"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-ac4ad503a55127bb",
          "locator": "Methods: approve, allowance, transferFrom"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": null,
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T15:08:18.373Z",
        "reviewer": "automated independent verification",
        "notes": [
          "Read the pinned WETH9 test/reference implementation deposit/withdraw, ERC-20 methods, wstETH wrap/unwrap and developer bridge models. The reference code is not misrepresented as proof of a particular live deployment.",
          "The receipt-wrapper example correctly ends with stETH, leaving ETH redemption separate. The QA does not generalize WETH mechanics, custody or one-to-one market pricing to every wrapped asset."
        ]
      }
    },
    {
      "id": "wrapped-assets-fact-receipt-wrapper",
      "articleSlug": "wrapped-assets",
      "statement": "Receipt wrapper: wstETH represents stETH through a changing conversion rate.",
      "sourceIds": [
        "source-0c2e10353d5983bd"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-0c2e10353d5983bd",
          "locator": "What is wrapped stETH (wstETH)?; wrap; unwrap"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": null,
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T15:08:18.373Z",
        "reviewer": "automated independent verification",
        "notes": [
          "Read the pinned WETH9 test/reference implementation deposit/withdraw, ERC-20 methods, wstETH wrap/unwrap and developer bridge models. The reference code is not misrepresented as proof of a particular live deployment.",
          "The receipt-wrapper example correctly ends with stETH, leaving ETH redemption separate. The QA does not generalize WETH mechanics, custody or one-to-one market pricing to every wrapped asset."
        ]
      }
    }
  ],
  "sources": [
    {
      "id": "weth",
      "label": "WETH9 reference implementation",
      "publisher": "Uniswap repository",
      "url": "https://raw.githubusercontent.com/Uniswap/v2-periphery/ed24991304291297c3b4a52818d02f46a17aa9a2/contracts/test/WETH9.sol",
      "locator": "deposit; withdraw; balanceOf",
      "note": "ETH deposits mint WETH balances; withdrawal burns balance and returns ETH.",
      "version": "v2-periphery commit ed24991304291297c3b4a52818d02f46a17aa9a2",
      "checkedAt": "2026-10-02",
      "recordId": "source-012a4cc1dd651125",
      "contentSha256": null
    },
    {
      "id": "erc20",
      "label": "ERC-20: Token Standard",
      "publisher": "Ethereum Improvement Proposals",
      "url": "https://eips.ethereum.org/EIPS/eip-20",
      "locator": "Methods: approve, allowance, transferFrom",
      "note": "The token spending allowance is separate from a website connection.",
      "version": "ERC-20 final",
      "checkedAt": "2026-10-02",
      "recordId": "source-ac4ad503a55127bb",
      "contentSha256": null
    },
    {
      "id": "wsteth",
      "label": "wstETH wrapper",
      "publisher": "Lido contributors",
      "url": "https://docs.lido.fi/contracts/wsteth/",
      "locator": "What is wrapped stETH (wstETH)?; wrap; unwrap",
      "note": "Fixed wrapper balances with changing stETH conversion rates.",
      "version": null,
      "checkedAt": "2026-10-02",
      "recordId": "source-0c2e10353d5983bd",
      "contentSha256": null
    },
    {
      "id": "bridges",
      "label": "Introduction to blockchain bridges",
      "publisher": "ethereum.org contributors",
      "url": "https://ethereum.org/developers/docs/bridges/",
      "locator": "How do bridges work?; Bridge types; Risk with bridges",
      "note": "Lock/mint, burn/mint and liquidity-based transfers have different trust assumptions.",
      "version": null,
      "checkedAt": "2026-10-02",
      "recordId": "source-707654935f40e45a",
      "contentSha256": null
    }
  ],
  "related": {
    "articles": [
      "liquid-staking",
      "blockchain-bridges",
      "defi-composability"
    ],
    "dossiers": [],
    "wallets": []
  },
  "revisionHistory": [
    {
      "date": "2026-10-02",
      "kind": "published",
      "summary": "First publication after primary-source research and independent automated verification."
    },
    {
      "date": "2026-10-02",
      "kind": "prepublication-review",
      "summary": "Before first publication, independent review checked and revised: sources. Read the pinned WETH9 test/reference implementation deposit/withdraw, ERC-20 methods, wstETH wrap/unwrap and developer bridge models. The reference code is not misrepresented as proof of a particular live deployment. The receipt-wrapper example correctly ends with stETH, leaving ETH redemption separate. The QA does not generalize WETH mechanics, custody or one-to-one market pricing to every wrapped asset."
    }
  ],
  "citation": "Degrees of Satoshi editorial project. “Wrapped assets: an interface change or a separate backing claim.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/wrapped-assets/"
}