The large American Coinbase announces that it will launch a synthetic version of Bitcoin on Ethereum. It concerns a token that is to be called Coinbase Wrapped Bitcoin (cbBTC).
Coinbase Bitcoin is already available
Based on Coinbase’s announcement, it appears that cbBTC is already available. They start by stating “cbBTC is onchain.” This essentially means that Bitcoin holders can leverage their capital to run DeFi applications on the Base and Ethereum blockchains.
According to Coinbase, cbBTC will be available on many major DeFi networks. These include Aave (AAVE), Curve Finance (CRV), Compound Finance (COMP), Moonwell (WELL), and Maple Finance (MPL).
In a new blog post, Coinbase explains how people using Bitcoin can get their hands on Coinbase’s version of BTC to enhance their DeFi experience.
“cbBTC removes some key points of friction by allowing users to use the Bitcoin they already own in new ways on the blockchain. cbBTC is built to work seamlessly with DeFi applications,” Coinbase said.
What can you do with this?
Then the big problem of DeFi immediately comes into play. Because we can now use a synthetic version of Bitcoin in the smart contract on Ethereum and other blockchains, but what can we do with that?
Coinbase gives the example that it is possible to use Bitcoin for liquidity protocols or to borrow other crypto assets. But the latter is of course not the reason why you buy Bitcoin, in order to then borrow other assets.
DeFi is still primarily a casino where it is possible to trade tokens against each other. We do not see any really interesting innovation happening there at the moment. At least not on a large scale.
BlackRock’s Institutional Digital Liquidity Fund on Ethereum (also known as BUIDL) is an interesting development. It brings US government bonds to life on the Ethereum blockchain. Currently, there is $500 million in capital in that fund.
Source: https://newsbit.nl/coinbase-lanceert-eigen-versie-van-bitcoin-op-ethereum/
