Coinbase, a renowned American crypto exchange, has launched wrapped Bitcoin (cbBTC) on its Ethereum Layer-2 solution, Base. As a result, Bitcoin (BTC) holders can now access BTC on Decentralized Applications (dApps) on Base and the Ethereum (ETH) ecosystems.
First Wrapped Bitcoin on the Base Layer 2 Network
Coinbase’s cbBTC is an ERC20 token with a 1:1 Bitcoin backing. This is the first wrapped Bitcoin to premiere on the Base network. Coinbase highlighted that the cbBTC token will initially be supported on the Bitcoin and Ethereum networks. In the future, the exchange plans to spread the token across other chains.
Coinbase stated that cbBTC will be available to trade on Decentralized Exchanges (DEXs) using Coinbase Wallet. The token may also be available on other third-party exchanges that choose to support it.
The token’s launch highlights Coinbase’s commitment to increasing Bitcoin’s adoption in Decentralized Finance (DeFi). The token will give users more ways to use Bitcoin for economic freedom.
The cbBTC token is restricted to certain jurisdictions. For now, only Coinbase’s users
in the US (excluding New York State), UK, EEA states, Singapore, Australia, and Brazil are allowed to send and receive the token.
However, many DeFi applications already support the cbBTC token. These protocols include Curve Finance, Aave, Compound Finance, Aerodrome, DeFinitive, and others.
The cbBTC token launch comes amid Coinbase’s recent efforts to increase Bitcoin’s utility. Coinbase integrated the Lightning Network in April to drive instant, low-cost payments for US-based users.
Innovative Solutions on Coinbase’s Base
According to L2Beat data, Coinbase’s Base is currently surging in key metrics. Notably, the Total Value Locked on Base has increased by 2.6% in the past 24 hours to $6.08 billion. This suggests increased performance and reliability on the scaling solution.
Additionally, the number of transactions recorded on the Base Network within the past 30 days rose to 125 million. At the same time, daily Transaction Per Seconds (TPS) surged by 18.17% to 54.27.
According to Grow the Pie data, the Base Network has also surpassed other leading Ethereum Layer-2 networks by active addresses. The number of distinct addresses interacting with Base increased by 16% in the past day to 1.36 million. With this growth in active addresses, Base has surpassed Arbitium One, Linea, Mantle, and Optimism.
Early cbBTC Criticism From Justin Sun
Shortly after the token was launched, Tron’s Founder, Justin Sun, expressed a pessimistic outlook on cbBTC. Sun claims the token lacks Proof of Reserve, has no audits, and can freeze anyone’s money any time.
Sun added that cbBTC is synonymous with a central bank representation of Bitcoin. “Essentially, it’s just ‘trust me.’ Any U.S. government subpoena could seize all your BTC,” Sun noted.
According to the founder, the merger between central banks and Bitcoin contradicts Satoshi Nakamoto’s vision of decentralization. He went on to say that Satoshi could never have envisioned a day like this would come when creating Bitcoin.
Sun’s comments quickly received support from some online community members. One user even likened the cbBTC token launch to mixing fire and ice.
