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Coinbase, one of the leading cryptocurrency exchanges, recently launched Coinbase Wrapped BTC. This Coinbase Wrapped BTC token is now available on Base and the Ethereum mainnet. Bitcoin holders can now explore more possibilities of Defi in the Ethereum and Base ecosystem through it.
Bitcoin is no longer just a store of value. With its current market cap of $1.14 trillion, there is an immense amount of liquidity available. As Bitcoin gains reliable and secure exposure to DeFi possibilities, we will see countless financial use cases emerge.
Data from blockchain analytics firm Arkham shows Coinbase has over 984.435k bitcoins in its onchain holdings, worth almost $57 billion at current prices.
What is Coinbase Wrapped BTC?
- It is an ERC-20 token. It’s backed by Bitcoin held by Coinbase at a 1:1 ratio. When you send Bitcoin from Coinbase to Base or Ethereum, it automatically turns into cbBTC. When you want to get your Bitcoin back, just send the cbBTC back, and you will get Bitcoin.
- Coinbase officially announced this on 12th September 2024,
Where can I use it?
- At the time of its launch, it will be available for sending and receiving on Coinbase in several countries, including the United States (excluding New York), the UK, EEA states, Singapore, Australia, and Brazil and soon it will be accessible worldwide on the Base and Ethereum networks. So if you live in one of these places, you can start exploring the DeFi world with your Bitcoin.
Benefits of cbBTC
Decentralized Finance (DeFi):
- You can use your Bitcoin as a cbBTC in Defi applications on Ethereum ecosystem
- You can deposit it as collateral to borrow other assets or lend it to earn interest
- You can provide it as liquidity to decentralized exchanges
- it can be used in yield farming strategies to earn rewards
- It is already integrated with several major DeFi platforms, including Aave, Curve, Compound, and Uniswap, allowing users to utilize their Bitcoin in various financial applications
Cross-Chain Interoperability
- This enables you to move your Bitcoin between the Bitcoin network and Ethereum-based networks like Base. This allows Bitcoin holders to utilise their Bitcoin in Ethereum’s DeFi ecosystem
Attracting institutional investors:
- The launch of this could attract more institutional investors to the Bitcoin and DeFi ecosystems. It could provide more benefits to investors as discussed above.
Bitcoin is not just as an asset used for storing value, but also as a gateway to numerous DeFi opportunities with this cbBTC. So now you have more opportunities and more ways to use your Bitcoin.
Also check this, 1 year of Base’s growth and support for builders and creators.
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