First, you may be wondering what are "Wrapped Cryptocurrencies" so let us explain. It means a cryptocurrency is wrapped into another cryptocurrency chain. Like XRP wrapped into an Ethereum chain. Tokensoft has partnered with Hex Trust and wrapped XRP into wXRP, to take a multi-custodial approach to make this cryptocurrency solid.
Wrapped XRP assets are backed by XRP 1:1 and moved to the Ethereum-based DeFi network in December 2021. This happened with the support of Hex Trust (a Hong Kong-based crypto custodian). This development allows XRP holders to access different DeFi applications, whether for AMMs (Automated Market Makers) or borrowing and lending purposes. The CEO of Tokensoft – Mason Borda confirmed the new update about wXRP.
In the past, other cryptocurrencies have been wrapped – e.g., Bitcoin, Filecoin, Zcash, and others. WXRP is the first DeFi-compatible form of XRP as per Borda’s statement. He also explained that WXRP is going to be a huge asset. XRP (as it is), is already one of the top ten digital assets with the largest crypto communities, he added.
Adding DeFi capabilities to the XRP ledger using federated side chains enhances XRP functionality to a great extent.
Wrapped started as a collaboration between Anchorage (custodian of U.S. regulated cryptocurrencies) and Tokensoft (a San Francisco-based company). These two firms have created wrapped versions of nine crypto tokens.
Wrapped is exploring new possibilities by taking a multi-custodian approach to provide interoperability for a variety of tokens.
According to Borda, not all cryptocurrency custodians support all digital assets. Working with different crypto custodians would open doors to greater token selections to create wrapped tokens. This would help build a vibrant DeFi ecosystem.
In the meantime, if you are looking to start your crypto portfolio, Rain’s support team is available 24/7 to assist. Feel free to contact us.
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