Coinbase cbBTC Token Now Live on Base and Ethereum

Key Points:

• Coinbase has introduced cbBTC, a new wrapped Bitcoin token available on its layer-2 network Base and the Ethereum mainnet.
• Coinbase cbBTC token allows Bitcoin to be used in DeFi applications to provide liquidity, borrow other cryptocurrencies, or engage in other activities.

Coinbase has announced that its new wrapped Bitcoin token, cbBTC, is live on its layer-2 network, Base, and on the Ethereum mainnet.

Read more: 21Shares Launches 21BTC to Disrupt the WBTC Market on Ethereum 

Coinbase cbBTC Token: New Wrapped Bitcoin Token for DeFi

The launch comes after a month in which a series of teasers popped up on social media channels belonging to Coinbase.

The Coinbase cbBTC token is an ERC-20 token that is fully backed 1:1 by Bitcoin (BTC), held in the custody of Coinbase. The new offering allows users to conveniently convert their BTC into cbBTC as they transfer between Coinbase and Ethereum or Base, and vice versa. The invention of cbBTC will help Bitcoin to be more functional within the DeFi ecosystem.

Wrapped Bitcoin exists on Ethereum and is equally backed 1:1 by Bitcoin. This concept aims to bridge Bitcoin’s liquidity with Ethereum’s programmable blockchain functionality for use in DeFi applications. The Coinbase cbBTC token will attempt a similar function but with the exchange’s infrastructure.

Unlike classic Bitcoin, Coinbase cbBTC token can be utilized across various DeFi platforms and open new means of leveraging Bitcoin holdings for users. With the cbBTC tokens, users will be able to supply liquidity to the DeFi protocols or provide their Bitcoin as collateral to borrow other cryptocurrencies. So far, the token is supported on major DeFi protocols like Aave, Compound Finance, Morpho, Spark, and Moonwell.

Coinbase Launches cbBTC Amid WBTC Controversies

Timing is important, as wrapped Bitcoin issued by BitGo has its set of challenges lately. The recent BitGo move to a new partnership with TRON founder Justin Sun has substantially generated controversy and took, at the same time, more interest in the wrapped Bitcoin space. There are those critics who feel that Sun’s involvement is contentious; hence, projects have been looking for alternative Bitcoin wrapper products.

Earlier this month, competitor 21.co, the parent company of 21Shares, also issued its wrapped Bitcoin product, 21BTC, to the Ethereum blockchain, one-upping much of the current competition on the market.

This new Coinbase cbBTC token hopes to seize the moment with a strong alternative offering for Bitcoin holders who wish to incorporate their assets into the DeFi ecosystem.