Four days ago Coinbase announced a teaser tweet for cbBTC which in simple terms is just wrapped BTC (Bitcoin) usable on ETH/Base blockchains backed by 1:1 BTC on Bitcoin chain. No more details are announced by Coinbase at this time apart from ‘Coming Soon’

This announcement is not only strategic for them but also comes during an Important time when trust is eroding in the OG BTC (WBTC) which recently announced a partnership with Bit Global which is backed by Justin Sun, The Creator of Tron and a serial master of questionable stuff.

Low Fee Tx

The most immediate and tangible effect of cbBTC is definitely the ability to leverage base chain to perform transactions for literal pennies in gas.

It will enable you to hold BTC as well as Sell with very low blockchain fees.

cbBTC role in DeFi Applications

cbBTC will allow Bitcoin holders to utilize their assets in various DeFi applications on the Base network, facilitating activities such as lending, borrowing, and staking, which are not possible on the Bitcoin blockchain alone

Direct Competition with WBTC

WBTC has been the dominant wrapped Bitcoin asset. Coinbase’s strong brand reputation and established custody solutions could attract users looking for a reliable alternative to potentially Justin Sun partnered WBTC.

While there’s no announcement on its launch, experts believe that within 6 months it will significantly challenge the liquidity and volume of WBTC and create a significant Bitcoin economy on Base.