A wrapped token is a cryptographic asset that is pegged to the value of another cryptocurrency. The asset is called a wrapped coin or wrapped token because the initial asset is put in a wrapped or specialized digital vault that allows the wrapped token to be created and used on another blockchain protocol. This is done because different blockchains tend to offer different types of functionality for a multitude of uses — so adding one blockchain\’s asset to another\’s network can open up a wider range of functional opportunities for that asset.
They are usually distributed at a 1:1 ratio. For example, 1 ETH for 1 wETH.