Interoperability
Interoperability is the idea that applications and data used on one blockchain should be accessible on other chains too. Think of the concept as crypto legos. The ability to combine and recombine elements from a variety of chains into entirely new and exciting applications.
For example Layer 2 scaling solutions built on top of popular Layer 1 blockchains like Ethereum. Expand and extend the capabilities of Layer 1 chains to new users and applications.
Because, effective Layer 2 chains ease the congestion on the main chain. Which allow new users the opportunity to get started using cryptoassets at a more accessible price point. Purchasing NFTs on Ethereum Layer 2 Polygon often costs a few dollars instead of potentially hundreds like it sometimes does on Ethereum.
Bridges are another important concept for interoperability. Many Bitcoin holders want to use DeFi applications on Ethereum while maintaining control of their Bitcoin.
Wrapping via bridges facilitates this. A Bitcoin holders sends their BTC to a smart contract that returns back wBTC. An ERC-20 token representing an equivalent value of BTC to what the user deposited in the smart contract.
The process is referred to as wrapping because you’ve effectively wrapped the Bitcoin in packaging. Which allows it to be used across the Ethereum network in a wide variety of applications.
Wallets are a foundational piece of technology to realize the vision of interoperability. Metamask empowers users to easily transfer cryptoassets between the L1 Ethereum chain and L2 chains like Polygon. So users can store and transfer their cryptoassets from multiple chains in one easy to use package.
Further Reading Interoperability
What is Wrapped Bitcoin (WBTC)? A Beginner’s Guide