What is a Wrapped Token? 🍬
You may have heard of the term “Wrapped Token” once or twice by now, or perhaps not at all. The wrapping concept and operation is important to the fundamental workings of cryptocurrencies, blockchains and exchanges. The idea can seem complicated but is actually rather simple — wrapping is when a cryptocurrency token is pegged to the value of another crypto.
The Wrapping operation allows for an asset to be tied to the value of an underlying asset that may or may not be present on the same blockchain, or on a blockchain at all. Still seem complicated?
Consider 3 bags of candy, sorted by wrapper color, where you can only see the color of the wrapper, not the candy inside. Red bag is Bitcoin Blockchain, Blue bag is Ethereum Blockchain, Yellow bag is Binance Smart Chain.
You want to take some of your candy from the red bag to the yellow bag, so what do you do? You change the color of the wrapper and send it over! It is as simple as that; the Smart Contracts can be used as different colored wrappers that achieve various functions, including cross-chain transactions.
Wrapping allows for more complex functions, interactions and cross-network interoperability between the blockchain networks and tokens. You have probably seen cryptocurrencies tied to the value of real life, tangible assets such as gold, silver and USD. (You must have heard of “USDT” by now: US Dollar Tether) These are examples of Wrapped tokens that peg the value of one asset to another.
A prominent example is Wrapped Bitcoin, pegged to the value of various tokens on their respective blockchains. (“wBTC” as found Binance Smart Chain, Ethereum network and countless others)
What is the conclusion of this? Cookie Finance Wraps your token in a contract to protect your assets on the Binance Smart Chain, and eventually all blockchains. Your staked/farming tokens are in a contract that ties the value of your investment to an insurance system with an automated payout.
As of now, there are only a few blockchain operations capable of providing Insured Farming. At Cookie Finance we feel it is the logical next step in Yield Farming and allows safe farming and protection on your investment.
Many did not feel comfortable investing in this space due to rugpulls and exchange issues such as flash loan exploits; Cookie Finance has set out to make Blockchain Insurance to keep you protected at all times🍪.