Iris folding is a paper craft technique that involves folding strips of colored paper in such a way to form a design.The center of the design forms an iris — a shape reminiscent of the iris diaphragm of a camera lens.istory [edit]. Iris folding originated in Holland, where early craft people made their designs using patterned paper cut from the inside of envelopes. Today, crafters use any light weight paper, such as scrapbook paper, origami paper, wrapping paper, the inside of envelopes or pages of magazines. Ribbon is also used.