How Is a “Wrapped Token” Created and Redeemed?

A wrapped token is created through a "lock-and-mint" process. The original asset is locked in a smart contract vault on its native chain, and an equivalent wrapped token is minted on the destination chain, maintaining a 1:1 peg.

Redemption reverses this: the wrapped token is burned on the destination chain, and the original asset is unlocked from the vault on the native chain.