- Launch of cbBTC and Its Features
- Utilization of cbBTC in DeFi Applications
- Market Competition and Launch Context
Coinbase has introduced its new wrapped Bitcoin token, cbBTC, which is now available on its layer-2 network Base and the Ethereum mainnet.
Launch of cbBTC and Its Features
cbBTC is an ERC-20 token fully backed 1:1 by Bitcoin (BTC) and held in the custody of Coinbase. The token allows users to conveniently convert BTC into cbBTC as they transfer between Coinbase and Ethereum or Base, and vice versa.
Utilization of cbBTC in DeFi Applications
cbBTC can be utilized across various DeFi platforms, opening new opportunities for Bitcoin holders. Users will be able to supply liquidity to DeFi protocols or provide BTC as collateral to borrow other cryptocurrencies. Currently, the token is supported on major DeFi platforms such as Aave, Compound Finance, Morpho, Spark, and Moonwell.
Market Competition and Launch Context
The launch of cbBTC comes amid challenges faced by competitors. Recent moves by BitGo in partnership with TRON founder Justin Sun have stirred controversy and increased interest in the wrapped Bitcoin space. Earlier this month, 21.co, the parent company of 21Shares, also issued its wrapped Bitcoin product, 21BTC, to the Ethereum blockchain, further intensifying competition. The new cbBTC token by Coinbase aims to attract Bitcoin holders looking to integrate their assets into the DeFi ecosystem.
The launch of cbBTC strengthens Coinbase's position in the wrapped Bitcoin market, offering users new opportunities to utilize BTC in DeFi applications.
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