Wrapped token

A wrapped token is a stand-in: a token that represents another asset one-for-one, in a form a particular blockchain or app can actually use. Wrapped ether (wETH) is the classic case — plain ETH doesn’t follow the same standard as ordinary tokens, so it gets “wrapped” into wETH that DeFi can handle, redeemable back to ETH whenever you want.

Why it matters: the wrapper is plumbing, not a different investment — a wrapped token is meant to track its underlying asset’s price exactly. It’s only as solid as whatever backs it, though, so a wrapped token from a sketchy bridge can drift from 1:1. And a wrapped and restaked token (like weETH, which earns yield on top of ETH) still rises and falls with the underlying — so if your rewards land in one, their fiat value isn’t fixed.

For example: ether.fi Cash pays its cashback in wETH straight to your vault — “up to 3% in wETH,” credited automatically, no claiming. That’s better than a volatile reward token like an issuer’s own coin, since it tracks ether rather than a thin token, but it’s still crypto, not dollars. The same card also lets you post weETH as collateral in its borrow mode. As of June 2026.