Coinbase Teases cbBTC Amid Wrapped Bitcoin Drama

Coinbase appears to be readying to capitalize on the drama surrounding Wrapped Bitcoin’s impending restructure by launching its own BTC token.

On Aug. 13, Coinbase teased the launch of cbBTC on social media, posting the cbBTC ticker for the first time alongside “coming soon.” Coinbase already offers cbETH, a liquid staking token representing Ether staked with the centralized exchange.

The tweet came as Wrapped Bitcoin (WBTC), the largest wrapped Bitcoin token, is facing backlash over its plans to restructure. On Aug. 9, BitGo, the company behind WBTC, announced it will transfer control over Wrapped Bitcoin to a joint venture between itself, BiT Global, and Justin Sun — Tron’s controversial founder — after 60 days.

MakerDAO, the largest collateralized debt protocol, is now pondering whether to disable new DAI minting backed by WBTC on both its Maker and SparkLend protocols. A governance proposal highlighted concerns regarding the Bitcoin underlying WBTC no longer being custodied in the U.S., a lack of public information about the joint venture, and the recent depegs suffered by the TrueUSD stablecoin after Sun became involved with the project last June.

Wrapped or tokenized Bitcoin tokens are BTC-backed assets used to move the value of Bitcoin onto other networks. WBTC operates on Ethereum and currently boasts a market cap of $9.38 billion — equating to just 0.78% of Bitcoin’s capitalization.

Base to foster Bitcoin-based DeFi ecosystem

Jesse Pollak, head of protocols at Coinbase and the creator of Base, the Ethereum Layer 2 from Coinbase, responded to the cbBTC news by tweeting that his team aims to build a thriving Bitcoin ecosystem on Base.

“I love Bitcoin, am so grateful for its role [in] kickstarting crypto, and we’re going to build a massive Bitcoin economy on Base,” Pollak said.

The comment comes as Base is extending its share of the Layer 2 market amid the success of its latest Onchain Summer campaign, which notably features points distributions for participants.

Data from GrowThePie shows 3.25 million wallets transacting on Base over the past week, equating to 61.3% of the nearly 5.3 million wallets active across Ethereum’s entire Layer 2 ecosystem.

Combined daily transaction volume across Ethereum Layer 2s tagged a new all-time high of 12.5 million on Aug. 13 after more than tripling since the start of February. Coinbase accounted for 31.8% of the total while retesting its record high of 3.98 million transactions.

Base is the second-largest L2 by total value locked with $6.37 billion, coming in behind Arbitrum One with $15.3 billion.

Read More: MakerDAO Mulls Offboarding WBTC Amid Wrapped Bitcoin Restructure