As a seasoned crypto investor with a knack for navigating the complexities of this dynamic market, I must admit that the recent launch of Coinbase Wrapped BTC (cbBTC) has piqued my interest. Having witnessed the meteoric rise and fall of numerous projects, I find myself intrigued by the swift surge in cbBTC’s market capitalization to over $100 million within a day of its launch.
Coinbase, a Nasdaq-listed cryptocurrency exchange, recently introduced a tokenized form of Bitcoin (cbBTC) on the Ethereum platform and its Layer-2 network, Base. This new version of Bitcoin quickly gained a market capitalization of over $100 million following its launch.
As per information from Dune Analytics and further reported by Crypto Briefing, cbBTC’s market capitalization surpassed $100 million within a day of its launch. The circulating supply exceeds 1,700 tokens, with the majority residing on the Ethereum network.
Coinbase Wrapped BTC (cbBTC) is an ERC-20 token that is backed 1:1 by Bitcoin held by Coinbase. Wrapped tokens allow users to leverage their existing Bitcoin holdings in various ways within the decentralized finance (DeFi) ecosystem.
Users have the opportunity to contribute their Bitcoin as liquidity across various Decentralized Finance (DeFi) systems, utilize it as security for borrowing diverse cryptocurrencies, and engage in a wider array of on-chain operations. The token is currently backed by several well-known DeFi platforms such as Aerodrome, Curve, Sky Protocol, Compound, Maple, and Aave.
Today marks a significant milestone for Coinbase as the market capitalization of cbBTC surpasses $100 million. The predominant movement of transactions is currently directed towards pools on Uniswap V3, specifically those involving ETH and cbBTC, wBTC and cbBTC, and USDC and cbBTC.— Matt Casto (@mcasto_) September 12, 2024
Initially, the token garnered endorsement from several industry professionals who deemed it exchangeable for Bitcoin on Coinbase, thereby sparing users from dealing with less liquid trading pools when exchanging their tokenized Bitcoin. However, this initiative also drew criticism from certain quarters.
As reported by Moonwell DeFi collaborator, Luke Youngblood, the launch has enabled approximately $20 billion in retail and $200 billion in institutional Bitcoin to become freely accessible and usable within the platform, he called “Base”.
Other users, however, said that Coinbase can “freeze and blacklist addresses transacting with cbBTC directly via the smart contract” while BitGo, the company behind leading tokenized Bitcoin project Wrapped Bitcoin (wBTC), “CANNOT freeze and blacklist addresses from tranactions with wBTC.”
Justin Sun, the creator of TRON, voiced his criticism towards Bitcoin as well. He emphasized concerns about the absence of Proof of Reserve audits in Bitcoin, which could potentially open the door for government interference. Consequently, he referred to Bitcoin as a “central bank’s digital currency.
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2024-09-14 04:15