Coinbase Introduces Wrapped Bitcoin Alternative
Coinbase has launched cbBTC, its wrapped Bitcoin alternative, on the Ethereum and Base networks. This new token allows users to utilize Bitcoin in decentralized finance (DeFi) applications across these networks, following Coinbase’s announcement earlier in August.
How cbBTC Works
The cbBTC token is backed 1:1 by Bitcoin held at Coinbase, allowing users to convert their Bitcoin into cbBTC and use it in DeFi protocols such as Aave, Compound, and Curve. It provides liquidity and collateral for loans, enhancing Bitcoin's usability within the Ethereum and Base ecosystems. This move expands Bitcoin’s potential beyond its traditional role as a store of value by enabling integration with various decentralized applications.
A Competing Alternative to Wrapped Bitcoin
With cbBTC, Coinbase aims to compete with Wrapped Bitcoin (WBTC), the largest tokenized Bitcoin product with a market cap of nearly $9 billion. Coinbase’s introduction of cbBTC is part of its broader strategy to integrate Bitcoin more deeply into DeFi applications, making it easier for users to interact with decentralized finance.
Information Source by The Block.
