The core difference
A native token is the asset a blockchain issues and runs on directly. ETH is native to Ethereum, SOL to Solana, BTC to Bitcoin. It is the same asset the network uses to pay for gas, and it needs no extra contract or custodian to exist. When you hold native ETH, you hold the base asset of the chain itself.
A wrapped token is a representation of one asset issued on another chain. Wrapped BTC forms such as WBTC and cbBTC are ERC-20 tokens on Ethereum, each backed one-to-one by real BTC held elsewhere. The wrapper tracks the price of the native asset, but operationally it is a different token. It settles at its host chain's speed and depends on whatever holds the backing.
Why wrapping exists
Networks cannot natively run each other's assets. Bitcoin has no smart contracts, so BTC cannot join Ethereum lending or trading on its own. Wrapping bridges that gap. A custodian or contract locks the native asset, mints a matching token on the target chain, and now that value can be swapped, supplied to a pool, or used as collateral in an ecosystem the native asset could never reach.
The same pattern explains wrapped gas tokens. On many chains the base asset is not itself an ERC-20, so contracts cannot handle it directly. A wrapped form such as WETH makes the gas asset behave like any other token, so pools and contracts can work with it. The value is identical and unwrapping is one step, but the wrapped form is what the plumbing uses.
- Native: the base asset of its own chain, used for gas, with no wrapper to trust.
- Wrapped: a representation on another chain, backed by the native asset held elsewhere.
- Wrapped forms give cross-ecosystem reach the native asset cannot have alone.
- Wrapped forms add reliance on whoever custodies the backing.
The custody and bridge dependency
The convenience of a wrapped token comes with a trust question the native asset never has. Someone or something has to hold the backing and honor redemptions.
Who holds the backing
Some wrappers are custodial. A named institution holds the native BTC and issues the token against it, and you are trusting that entity to stay solvent and honest. Others are issued by contracts or bridge systems that lock the asset programmatically. Either way, the wrapped token is only as sound as the mechanism behind it, and that is the extra assumption you take on.
The bridge link
A wrapped asset that travels between chains usually rides a bridge, and the bridge becomes part of the token's risk. If the bridge or its custody is compromised, the wrapper can lose its peg to the native asset even while the price feed still points at the native price. Widely used, transparent wrappers with clear reserves carry modest risk. Obscure or thinly documented ones deserve real scrutiny before you hold them.
When it matters for a swap
For a swap, the practical question is which form you actually need at the destination. An app on Ethereum will want the wrapped form. Self-custody in cold storage usually means you want the native asset. Asking for the wrong one means an extra wrap or unwrap later, with its own fee.
Moving between native and wrapped forms is a cross-chain move, not a simple in-place swap. It involves the source chain, the wrapping mechanism, and the destination chain. Multiswap compares those routes and delivers the form you ask for, so switching between native BTC and WBTC or cbBTC is one comparison rather than a manual lock, mint, and bridge. Because it is non-custodial, you hold the result in a wallet you control.