“We’re going to build a massive Bitcoin economy on Base,” said Base creator Jesse Pollak.
Coinbase teased plans to launch a ‘cbBTC’ token.
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Posted August 14, 2024 at 1:05 am EST.
A cryptic post from Coinbase’s X account triggered speculation that the exchange was working on a new alternative to Wrapped Bitcoin (WBTC).
“cbBTC,” wrote Coinbase in a post on Tuesday evening, which it followed up with “coming soon” a few hours later.
A comment left by Coinbase’s layer 2 network Base’s official X account that said “based” then added fuel to theories that the firm plans to roll out its own version of WBTC on Base. The layer 2 network’s creator Jesse Pollak all but confirmed that plan was in motion shortly after.
“To say it out loud: I love bitcoin, [I] am so grateful for its role kickstarting crypto, and we’re going to build a massive bitcoin economy on base,” said Pollak on X.
If Coinbase does intend to launch a cbBTC on Base, it would likely come with benefits of lower fees to mint and redeem tokens, and drive increased usage of wrapped Bitcoin tokens by drawing in more users that trust the Coinbase brand.
A potential alternative to WBTC comes at a particularly interesting time, given the controversy around one of WBTC’s primary custodians BitGo, and its plans to move custody out of the US and into Hong Kong and Singapore.
There is around 154,000 WBTC on Ethereum, worth over $9 billion at the time of writing. Major DeFi lending protocols like MakerDAO and Aave have a significant amount of WBTC as collateral, and have already initiated governance talks on the next steps in light of BitGo’s custody changes.
MakerDAO’s risk management unit BA Labs proposed offboarding WBTC, while Aave’s risk unit Chaos Labs seems to be leaning towards a more wait-and-see approach.
“This week may mark the turning point when BitGo went from being the market dominant BTC derivative, with a $9.3 billion market cap, securing several billion in loans across DeFi, to a very rapid decline,” said Luke Youngblood, founding contributor to Moonwell and who previously built Ethereum staking at Coinbase.
“We don’t know when cbBTC will launch, but BitGo fumbling the ball and losing the entire tokenized Bitcoin market in a very short period of time was not something anyone predicted a week ago.”
