Coinbase Launches Wrapped Bitcoin (cbBTC) on Base
Coinbase, the renowned American crypto exchange, has officially launched Wrapped Bitcoin (cbBTC) on its Ethereum Layer-2 solution, Base. This development enables Bitcoin (BTC) holders to access their BTC on Decentralized Applications (dApps) within the Base and Ethereum (ETH) ecosystems.
First Wrapped Bitcoin on Base Network
cbBTC is an ERC-20 token backed 1:1 by Bitcoin, marking the first Wrapped Bitcoin available on the Base Layer 2 network. Initially, cbBTC will be supported on both the Bitcoin and Ethereum networks, with Coinbase planning to expand its availability across other blockchains in the future.
Coinbase has also announced that cbBTC will be tradable on Decentralized Exchanges (DEXs) via the Coinbase Wallet, and it may be supported by other third-party exchanges that choose to list it. This launch underscores Coinbase’s commitment to increasing Bitcoin’s adoption within Decentralized Finance (DeFi).
Key Features of cbBTC
- ERC-20 token backed 1:1 by Bitcoin
- Initial support on Bitcoin and Ethereum networks
- Tradable on DEXs using Coinbase Wallet
- Potential listing on third-party exchanges
- Restricted to specific jurisdictions
Regional Availability
At launch, cbBTC is restricted to users in specific regions. Coinbase users in the US (excluding New York State), UK, EEA states, Singapore, Australia, and Brazil can send and receive cbBTC.
Several DeFi protocols, including Curve Finance, Aave, Compound Finance, Aerodrome, and DeFinitive, already support cbBTC. This broad support offers new avenues for Bitcoin holders to leverage their assets within the DeFi space.
Coinbase’s Broader Bitcoin Strategy
Coinbase has been making strides to enhance Bitcoin’s utility. The launch of cbBTC follows Coinbase’s April integration of the Lightning Network, designed to facilitate instant, low-cost payments for US-based users. These initiatives reflect Coinbase’s efforts to drive broader Bitcoin adoption in decentralized applications and payments.
Base Network Growth
Coinbase’s Layer-2 solution, Base, has shown strong growth in key metrics. According to L2Beat data, the Total Value Locked (TVL) on Base has increased by 2.6% in the past 24 hours, reaching $6.08 billion. This rise in TVL highlights the network’s increasing performance and reliability.
Additionally, Base has recorded 125 million transactions over the last 30 days. The network’s daily Transactions Per Second (TPS) surged by 18.17% to 54.27, indicating a growing user base. In fact, the number of distinct addresses interacting with Base jumped 16% in a day, reaching 1.36 million, surpassing other Ethereum Layer-2 networks such as Arbitrum One, Linea, Mantle, and Optimism.
Justin Sun’s Criticism of cbBTC
Shortly after the launch of cbBTC, Tron founder Justin Sun voiced concerns, criticizing the token for its lack of Proof of Reserve and absence of audits. He argued that Coinbase could freeze users’ funds at any time, likening cbBTC to a central bank’s representation of Bitcoin.
Sun’s comments have gained support from some online community members, with one user comparing the launch of cbBTC to “mixing fire and ice.” Sun further suggested that this move contradicts Satoshi Nakamoto’s vision of decentralization, asserting that Bitcoin’s creator would never have envisioned such a centralized approach to Bitcoin management.
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