Coinbase's Wrapped Bitcoin 'cbBTC' Goes Live, Shaking Up the Market

Coinbase has officially launched its version of wrapped Bitcoin, known as cbBTC, on the Ethereum and Base networks. This new offering allows users to utilize Bitcoin in decentralized finance (DeFi) applications, marking a significant move in the crypto space.

Key Takeaways

• Coinbase introduces cbBTC on Ethereum and Base networks.

• cbBTC allows Bitcoin to be used in DeFi applications for trading, lending, and collateral.

• Automatic conversion features for Coinbase users transferring Bitcoin to or from these networks.

• cbBTC aims to challenge BitGo's WBTC, the current market leader.

• Available to Coinbase users in the U.S. (excluding New York State), U.K., EEA states, Singapore, Australia, and Brazil.

Coinbase's Entry into Wrapped Bitcoin Market

Coinbase has entered the wrapped Bitcoin market with the launch of cbBTC, an ERC-20 token backed 1:1 with Bitcoin held by Coinbase. This move allows users to leverage their Bitcoin holdings in new ways on-chain, such as providing liquidity to DeFi protocols or using it as collateral to borrow other crypto assets.

Supported DeFi Services

Several DeFi services are expected to support cbBTC, including:

• Exchanges: Aerodrome, Curve

• Lending Applications: Aave, Sky Protocol, Compound

• Real-World Assets Provider: Maple

• Cross-Chain Bridges: deBridge

Bitcoin sent by Coinbase users from the exchange to specific addresses on Base or Ethereum will automatically be converted 1:1 to cbBTC. When users receive cbBTC in their Coinbase accounts, it will be converted 1:1 from cbBTC to BTC.

Availability and Market Impact

At launch, cbBTC will be available to Coinbase users in the U.S. (excluding New York State), U.K., EEA states, Singapore, Australia, and Brazil. This launch follows Coinbase's hint at entering the wrapped Bitcoin market and challenging the existing leader, BitGo's WBTC, which is backed by over $8 billion worth of the asset.

Justin Sun's Criticism

Tron founder Justin Sun, who partially controls an entity named BiT Global that now handles the custody for WBTC, has criticized cbBTC. Sun pointed out that cbBTC lacks Proof of Reserve, has no audits, and can freeze anyone's balance at any time, essentially requiring users to trust Coinbase.

Future Prospects

Jesse Pollak, the creator of Base, mentioned that the team plans to build a "massive Bitcoin economy" on the network. With cbBTC, Coinbase aims to foster a significant Bitcoin economy on Base, challenging the dominance of BitGo's WBTC in the wrapped Bitcoin market.

Sources

• Wrapped Bitcoin Market Heats Up as Coinbase's cbBTC Goes Live, CoinDesk.

• El exchange de criptomonedas Coinbase lanza 'cbBTC', su versión de Wrapped Bitcoin (BTC), CoinDesk.

• Рынок Wrapped Bitcoin накаляется после запуска cbBTC от Coinbase, CoinDesk.

• Mercado de Wrapped Bitcoin Aquece com o Lançamento do cbBTC da Coinbase, CoinDesk.

• Umiinit ang Wrapped Bitcoin Market habang Nag-live ang cbBTC ng Coinbase, CoinDesk.