This is a basic extension that allows you to wrap selected text in backticks. It's useful for writing markdown, or for quickly turning a string into a template literal.
Default keybinding is ctrl+shift+alt+x but can be changed in the keyboard shortcuts menu (ctrl+k + ctrl+s). The command is called "Capsulate: Selected Text in Backticks".
Release Notes
More detail can be found in the CHANGELOG.md file.