Coinbase cbBTC Token Still Not Listed on DefiLlama Due to Lack of PoR

Key Points:

• Critics, including DefiLlama’s founder, highlight the lack of proof of reserves (PoR) for the Coinbase cbBTC token, leading to its exclusion from the DefiLlama platform.
• The cbBTC user agreement raises concerns about Coinbase’s reimbursement policy for lost Bitcoin,

Concerns are growing over the Coinbase cbBTC token, a wrapped Bitcoin product, as critics raise concerns about the product’s lack of transparency and without a proof-of-reserve system.

Read more: Coinbase cbBTC Token Now Live on Base and Ethereum

Criticisms Mount Over Lack of Transparency for Coinbase cbBTC Token

0xngmi, founder of DeFi dashboard DefiLlama, recently took to the social media platform X to criticize Coinbase cbBTC token for failing to provide proof of reserve, a practice typically utilized by cross-chain bridges such as WBTC to prove that the tokens issued are fully backed by underlying assets.

The founder of DefiLlama therefore said that lack of transparency is why cbBTC will not be listed on DefiLlama because the total value locked in cbBTC cannot be independently verified. 0xngmi also said DefiLlama has applied this same standard to all projects, including Coinbase, and won’t make exceptions.

Fast Market Adoption, Expansion Plans for cbBTC

Another red flag regarding the crypto community is the cbBTC user agreement. There’s supposedly a clause in the terms that says Coinbase isn’t obliged to give a full refund to the customers if the Bitcoin was lost due to malicious behaviour or other unforeseen events. Instead, the clients would get a share of whatever Bitcoin remained in proportion. This further instilled scepticism around the product.

To that, Coinbase’s Chief Legal Officer Paul Grewal waded in, directly addressing the concerns and the company’s position. He reaffirmed that in case the underlying Bitcoin ever gets lost, Coinbase would refund clients in a full bid to squash FUD over the new product.

Coinbase cbBTC token jumped to the third most popular in seven days from the product’s issuance, as per data from CryptoQuant. Coinbase aims to extend cbBTC onto the Solana blockchain after its successful launching on Ethereum and Base networks that currently back the token 1:1 with Bitcoin.