CryptoETHCoinbase Launches Wrapped Bitcoin on Ethereum and Base Networks

Coinbase Launches Wrapped Bitcoin on Ethereum and Base Networks

Coinbase has launched its tokenized version of Bitcoin, known as Coinbase Wrapped BTC (cbBTC), on the Ethereum and Base networks. This new offering enters a competitive market where the leading wrapped Bitcoin token, backed by over $8 billion in assets, dominates.

cbBTC is an ERC-20 token designed to be backed 1:1 by Bitcoin held by Coinbase. It enables users to leverage their Bitcoin holdings in various ways within the decentralized finance (DeFi) ecosystem. For example, users can provide their Bitcoin as liquidity for DeFi protocols or use it as collateral to borrow other cryptocurrencies.

Several DeFi platforms will support cbBTC from its launch, including exchanges Aerodrome and Curve, lending applications Aave, Sky Protocol, and Compound, as well as real-world asset provider Maple and cross-chain bridge deBridge, among others.

Coinbase users who transfer Bitcoin to designated addresses on Base or Ethereum will have it automatically converted 1:1 to cbBTC. Conversely, when cbBTC is transferred back to Coinbase, it will be converted back to Bitcoin at a 1:1 ratio.

Initially, cbBTC will be available to Coinbase users in the U.S. (excluding New York State), U.K., EEA countries, Singapore, Australia, and Brazil.

The introduction of cbBTC follows recent controversies surrounding BitGo’s wrapped Bitcoin (WBTC) token, which remains the largest player in this space with a valuation exceeding $8 billion.

Jesse Pollak, a creator of Base, had previously mentioned plans to develop a significant Bitcoin economy on the network. In response to the launch, Justin Sun, founder of Tron and partial controller of BiT Global, the entity now responsible for WBTC custody, criticized cbBTC. Sun highlighted concerns about the lack of Proof of Reserve and audits for cbBTC, claiming it operates on a “trust me” basis and can potentially freeze balances at any time.

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Andrew
Andrew
Self-taught investor with over 5 years of financial trading experience Author of numerous articles for hedge funds with over $5 billion in cumulative AUM and Worked with several global financial institutions. After finding success using his financial acumen to build an investment portfolio, Andrew began writing and editing articles about the cryptocurrency space for sites such as chaincryptocoins.com, ensuring readers were kept up to date on hot topics such as Bitcoin and The latest news on digital currencies and Ethereum.

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