The 1st one is correct The 1st one indicates that the object was in the past made from bubble wrap. It might still be made of bubble wrap right now. The 2nd one is incorrect, as it does not have "to be" verb. It should be corrected to "It seems to be made of bubble wrap"

You can also say “It seems to be made…”

The first one is correct, that’s because English hardly ever skips an object (it/she/he etc.)