cbBTC by Coinbase Launches in Search of DeFi Surge on Base and Ethereum
Coinbase has officially introduced its wrapped Bitcoin token, cbBTC, on its layer-2 network, Base, and Ethereum mainnet, as confirmed in a statement on September 12. This launch followed a teaser about the product on the social media platform X approximately a month earlier.
cbBTC, as described by Coinbase, is an ERC-20 token that is fully backed by Bitcoin and held in custody on the platform. When users transfer BTC from Coinbase to Base or Ethereum, it automatically converts to cbBTC and vice versa. This feature allows users to utilize their BTC on different networks, with the aim of driving innovative financial applications and promoting Bitcoin adoption in DeFi.
Several major DeFi protocols, such as Aave, Morpho, Sky, Compound, Aerodrome, Curve, Veda, Mellow, and the real-world asset platform Maple, have already integrated cbBTC for their users. Furthermore, cbBTC is accessible through the Coinbase application in select regions like Singapore, the UK, the European Economic Area, Australia, Brazil, and the US (excluding New York State). The asset will also be globally available on Base and Ethereum.
Data from blockchain analytics firm Arkham Intelligence reveals that Coinbase holds over 984,000 BTC, valued at approximately $57 billion. Most of this BTC is held for exchange-traded fund issuers like BlackRock, which custody their ETF assets with the exchange.
Coinbase’s launch of cbBTC coincides with challenges faced by the dominant Wrapped Bitcoin token issued by BitGo, WBTC. Recent concerns arose among crypto users due to BitGo’s partnership with TRON founder Justin Sun, leading to a search for alternatives to WBTC. In response, projects like 21.co, the parent company of 21Shares, introduced its Wrapped Bitcoin product (21BTC) on the Ethereum blockchain. Additionally, DeFi protocol Threshold proposed merging its BTC “wrapper” token, tBTC, with WBTC to address centralization concerns and support the more popular BTC product.
In conclusion, Coinbase’s introduction of cbBTC offers users a new way to engage with Bitcoin on different networks, while the crypto community navigates challenges surrounding existing Bitcoin wrapper tokens.
