About Asset/Token Wrapping and Cross-Chain Bridges

Asset wrapping or token wrapping is a straightforward approach to moving assets from one chain to another. The core idea is that an asset, for example ETH, is locked on one chain (Ethereum), and a synthetic, “wrapped” asset (wETH) is minted on another chain (e.g., Solana). The core technical challenge with token wrapping is to ensure that the wrapped asset stays in sync with the underlying reserves, that the number of wETH on Solana remains in one-to-one correspondence with the ETH held in escrow on the Ethereum chain. There are two core methods for ensuring that the wrapped asset remains synchronized to the reserve asset - custodial and non-custodial.