Wrapped tokens are a mechanism used in blockchain ecosystems to represent and trade assets from one blockchain on another. The process of creating wrapped tokens involves the creation of a bridge or gateway between two different blockchain networks.

Here's a general overview of how wrapped tokens are created:

Choose the Source Blockchain and Asset:
- The process starts by selecting the blockchain where the original asset exists. This could be a well-known blockchain like Ethereum, Binance Smart Chain, or any other blockchain supporting smart contracts.
Deploy Smart Contracts:
- Smart contracts are deployed on the source blockchain to manage the creation, transfer, and destruction of the wrapped tokens. These smart contracts typically adhere to a set of standards (e.g., ERC-20 for Ethereum) to ensure compatibility and ease of use.
Locking of Original Assets:
- Users who want to obtain wrapped tokens initiate a process to lock their original assets on the source blockchain. This involves sending the assets to a specific address controlled by the smart contract.
Verification and Validation:
- Once the original assets are sent to the specified address, the smart contract verifies the transaction and ensures that the user has deposited the correct amount of assets.
Minting Wrapped Tokens:
- After verification, the smart contract on the source blockchain mints an equivalent amount of wrapped tokens on the destination blockchain. These wrapped tokens are representative of the locked assets and are pegged to the value of the original assets.
Transfer to Destination Blockchain:
- The newly minted wrapped tokens are then made available on the destination blockchain. Users can now trade, transfer, or use these wrapped tokens within the ecosystem of the destination blockchain.
Redemption and Burning:
- If users wish to convert their wrapped tokens back to the original assets, they follow a similar process in reverse. They send the wrapped tokens to a smart contract on the destination blockchain, and the equivalent amount of original assets is released on the source blockchain. The wrapped tokens are typically burned or destroyed in this process.
Integration with Oracles (Optional):
- To maintain a stable peg to the value of the original asset, some wrapped token systems integrate with oracles. Oracles provide real-time price feeds, allowing the smart contract to adjust the supply of wrapped tokens based on market conditions.

One common example of wrapped tokens is Wrapped Bitcoin (WBTC), where users can lock their Bitcoin on the Bitcoin blockchain, and an equivalent amount of WBTC is minted on the Ethereum blockchain.

It's important to note that the creation and use of wrapped tokens involve trust in the underlying smart contracts and the entities operating the bridge between blockchains. Security audits, transparency, and community trust are essential factors in the successful adoption of wrapped tokens.