riesgocontraparte

Some digital currencies never leave their original network, even when you use them on a completely different network.

If you have bitcoin and want to use it on Ethereum, you can’t just move it over. Bitcoin lives on its own chain, with its own rules. It doesn’t cross over on its own. What you can do is get a version of that bitcoin that circulates on Ethereum, while the original is kept somewhere else. Still. Without leaving its network.

The mechanism is simple. Someone gives 1 bitcoin to a custodian, who locks it away and issues 1 $WBTC on Ethereum. One for one. The bitcoin never leaves the vault. What you buy and sell is the receipt. And that receipt is worth something only as long as the custodian still holds the bitcoin.

The real risk isn’t in the network where the copy circulates, or in a coding error in the contract. It’s with the custodian. Whether it remains solvent, whether it still holds the bitcoin, whether it’s still willing to return it. This is called counterparty risk. And if the custodian goes bankrupt or stops responding, the copy is left without backing. Even if the network works perfectly.

That copy that lives on another network, backed by someone holding the original, is called a wrapped token.

KEY CONCEPTS
- A wrapped token isn’t the original. It’s a copy, and it’s worth what it’s worth because an external party holds the original and promises to return it.
- The backing depends on the custodian’s solvency, not on the protocol where the wrapped token circulates.
- A network running without issues doesn’t tell you whether the asset backing the wrapped token still exists.

It’s the same logic as a certificate of deposit. The paper represents the gold held in the vault, and is worth something only as long as that gold is still there.

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#TokensEnvueltos #Custodia #RiesgoContraparte #CriptoActivos