What Are KCC Wrapped Tokens and How Do They Work?
Wrapped tokens are cryptocurrency tokens that are linked to the value of another cryptocurrency. The original asset is placed in a wrapper, a kind of digital vault that allows the wrapped version to be created on a different blockchain.
Wrapped tokens are a way around this restriction and allow non-native assets to be used on a blockchain.
What is the meaning of a wrapped token?
Wrapped tokens are similar to stablecoins in the sense that they draw their value from another asset. In the case of a stable coin, this is generally fiat cash. In the case of a wrapped token, it’s generally an asset that lives on another blockchain.
A wrapped token is a cryptocurrency that has been tokenized. Its value is linked to the asset it represents, and it may usually be redeemed (unwrapped) at any time. It typically refers to an asset that isn’t native to the blockchain on which it was created.
What is the technology behind wrapped tokens?
As an example, we’ll look at Wrapped Bitcoin (WBTC), an Ethereum-based tokenized version of Bitcoin. WBTC is an ERC-20 token with a one-to-one peg to Bitcoin’s value, allowing you to utilize BTC on the Ethereum network efficiently.
Wrapped tokens usually need a custodian, which is an entity that retains an equivalent quantity of the asset as the wrapped amount. A merchant, a multi-sig wallet or even a smart contract can serve as the custodian. In the case of WBTC, the custodian must keep 1 BTC for every 1 WBTC issued. On-chain proof that this reserve exists.
Wrapped tokens on KuCoin Community Chain (KCC)
Bitcoin and many other Crypto may be wrapped for use on the KuCoin Community Chain in the same way that wrapped tokens on Ethereum can (KCC).
The KuCoin Community Chain Bridge enables you to wrap your crypto assets (MATIC, BAT, CRO, USDT, CHZ, GRT, and many others) for usage on the KuCoin Community Chain. You may exchange your assets or use them in various yield farming applications once you’ve brought them to KCC.
The use of wrapped tokens has its limitations.
The majority of existing wrapped token solutions need trust in the custodian that holds the funds. Wrapped tokens can’t be utilized for actual cross-chain transactions since the technology isn’t yet mature enough. Instead, they must go via a custodian.
Due to rising gas prices, the minting procedure might be expensive and may result in some slippage.
Conclusions
Wrapped tokens assist in the creation of additional cross-chain connections. A wrapped token is a tokenized copy of an asset that exists on a different blockchain.
Links to KuCoin Community Chain Webpages and Social Networks
Project
Web: https://www.kcc.io/
Documentation: https://docs.kcc.io/
Explorer: https://explorer.kcc.io/
Social Networks
Discord: https://discord.gg/H5ucJydSyd
Twitter: https://twitter.com/KCCOfficialTW
Telegram NG: https://t.me/KCCOfficialNigerianCommunity
Telegram:
https://t.me/KCCOfficialEnglishCommunity
Telegram Channel: https://t.me/KCCOfficialChannel
