cbBTC Token Launches on Coinbase Base & Ethereum

Coinbase cbBTC Token: New Wrapped Bitcoin Token for DeFi

The cbBTC token is an ERC-20 token fully backed 1:1 by Bitcoin (BTC), which is securely held by Coinbase. Users can seamlessly convert their BTC into cbBTC when transferring between Coinbase, Ethereum, or Base. This new token aims to enhance Bitcoin’s functionality within the DeFi ecosystem.

Wrapped Bitcoin exists on Ethereum and is also backed 1:1 by Bitcoin. The goal is to bridge Bitcoin’s liquidity with Ethereum’s programmable blockchain for use in DeFi applications. Coinbase’s cbBTC token seeks to provide a similar function, leveraging the exchange’s infrastructure.

Benefits and Use Cases of cbBTC

Unlike traditional Bitcoin, the cbBTC token can be used across various DeFi platforms, opening new avenues for Bitcoin holders. With cbBTC tokens, users can:

• Supply liquidity to DeFi protocols
• Use Bitcoin as collateral to borrow other cryptocurrencies

Currently, cbBTC is supported by major DeFi protocols such as:

• Aave
• Compound Finance
• Morpho
• Spark
• Moonwell

Coinbase Launches cbBTC Amid WBTC Controversies

The timing of cbBTC’s launch is significant, given recent controversies surrounding wrapped Bitcoin issued by BitGo. BitGo’s new partnership with TRON founder Justin Sun has sparked controversy, leading many to seek alternative Bitcoin wrapper products.

Earlier this month, competitor 21.co, the parent company of 21Shares, introduced its wrapped Bitcoin product, 21BTC, to the Ethereum blockchain. This move has intensified competition in the market.

With cbBTC, Coinbase aims to offer a compelling alternative for Bitcoin holders looking to integrate their assets into the DeFi ecosystem, positioning itself strongly amidst the evolving landscape of wrapped Bitcoin products.