Wrapped Tokens and Evidential Equivalence in Reconstructions

Wrapping converts an asset issued under one set of conditions into a different asset issued under different conditions. The user often holds the wrapper, the venue often quotes the underlying, and the difference between the two becomes visible only when the redemption path is tested. The file documents the actual holding rather than the venue's preferred display.

A position stated in the underlying when it is actually held in the wrapper carries a different risk profile and a different recovery path. The classification is not pedantic; it is the difference between a position the issuer has promised to honour and a position the issuer has not.

On-chain records show the wrapping contract interaction: an underlying transferred to the contract and a wrapper minted to the user's address, or the reverse for unwrapping. Venue records may show the result as a balance change in the underlying without mentioning the contract interaction at all.

The file pairs the two records where both are available and records the divergence where they disagree. A venue's silent translation of a wrapper into the underlying is not a finding against the venue; it is a presentation behaviour the file documents and corrects.

The classification distinguishes the underlying asset, the wrapper issued by a custodian on the same chain, the wrapper issued by a multi-signature contract or DAO, and the bridge variant issued on a different chain. Each carries a different backing model and a different set of failure modes.

The file names the variant rather than treating all wrappers as a single category. A bridge variant on a chain different from the underlying has additional dependencies — the bridge contract, the validator set, the custody arrangement — that the file records as part of the position rather than as background.

Verification of the redemption path means documenting the conditions under which the wrapper converts to the underlying: the contract function, the fees, the time window, the counterparties involved. The file records the path rather than asserting that one exists.

Issuer solvency on the engagement's reference date is recorded where it is verifiable from public sources. The file does not opine on solvency; it records what the public record says about the issuer's reserves, audits or disclosures, with sources cited and dates preserved.

A wrapper that traded below par on the engagement's reference date is documented at the relevant figure with the source for the price and the methodology for the timestamp. Treating a depegged wrapper at par is a quiet substitution that misstates the position.

A halt on redemption — by the issuer, by a regulator, by a bridge operator — is recorded as a finding rather than ignored. The file documents the halt's start date, its stated reason, and the status of redemption as at the engagement date.

Control of the wrapper is documented by the same signed-message and chain-record methods that document control of any address-held asset. The file does not assume that control of the wrapper implies control of the underlying; the two are linked only by the redemption arrangement.

Transfer continuity through a wrap-and-unwrap cycle is documented as a sequence of distinct events: transfer of the underlying into the contract, mint of the wrapper, transfer of the wrapper to its destination, burn of the wrapper, transfer of the underlying out. Each event has its own hash, its own timestamp and its own counterparties.

Cross-chain variants are documented with the originating chain, the bridge protocol, the receiving chain and the variant token contract address. The file records the bridge fee, the wait time and the backing model rather than presenting the receiving-side balance as if it had moved continuously.

Where the bridge is itself the source of substantial risk — a known exploit history, a recent governance change, a paused contract — the risk is recorded as part of the position rather than buried in a footnote. The file's job is to surface the dependencies, not to disguise them.

Where the engagement's purpose depends on the position being held in the underlying — a counterparty review requiring the underlying as collateral, a tax position requiring the underlying as the relevant asset — the framework identifies the redemption step that would convert the holding. The framework is descriptive rather than directive.

Where redemption is impaired by an issuer halt, a regulatory action or a bridge pause, the framework refers the question to qualified counsel rather than recommending action against an impaired counterparty. The file supports the determination; the determination itself belongs to the people authorised to make it.