# NFT Wrapping

NFT Wrapping follows mechanics like ERC-20 token wrapping that enables native digital assets, like $ETH, to interact with smart contracts in an ecosystem. Further, without token wrapping, the concept of interoperability through “bridging” tokens would either be non-existent or limited in its scalability. Wrapping tokens takes ERC-20 tokens outside of the walled garden and transfers value across networks.&#x20;

The standard NFT is often an ERC-721 token, while there are functional differences with ERC-20 tokens, such as storing metadata in a centralized or decentralized manner that is called by the owner of the NFT, or those that can view the token contract address on-chain.&#x20;

NFT Wrapping is a reverse-compatible process.&#x20;

Locking the original NFT in a wrapping contract, and minting a new NFT, known as a wrapped NFT (wNFT), maintains the characteristics of the original NFT while applying pre-programmed functions into the wNFT.&#x20;

For example, soul-bound tokens involve disabling the transfer of ownership. For decentralized identity management, the issuance post-KYC of a wrapped NFT with programmed features such as disabling ownership transfer increases the difficulty of online fraud. A soul-bound token can store users’ personal information that cannot be disclosed without a private key authorization from the owner of the personal information contained within. Further, it removes the burden from centralized entities to store and ensures that information does not fall into the hands of those with nefarious goals.&#x20;

Wrapped NFTs can be issued as a treasury contract, and NFTs can serve as proof of membership where a holder can participate in governance for a treasury contract or receive a share of the underlying asset(s).&#x20;

NFT Wrapping is a requirement for NFTs that are foreign to a metaverse. To be compatible with a particular metaverse, the wrapping contract must conform to the standards of that metaverse and apply 3D modelling capabilities into the wrapped NFT for it to exist as an item in a virtual world.

Oracles data feeds can be pulled into a wrapped NFT contract to change the behaviour of an NFT.&#x20;

NFT Wrapping is also effective as a token launchpad. As it stands, token sales often require a vested token contract that issues tokens periodically to a user. However, the investor does not have custody of the contract itself. By the investor having custody, they could sell their tokens before vested releases by selling the wNFT itself, one of the most potent advantages of which include an OTC sale through an NFT marketplace that avoids negatively impacting the market value of the vested token.&#x20;

These are just a handful of wrapping functionalities that have already been implemented. This is by no means an exhaustive list; the potential of NFT Wrapping is still very much in discovery and applications are seemingly endless.&#x20;

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