Coinbase, a leading US-based cryptocurrency exchange platform, has recently introduced Coinbase Wrapped Bitcoin (cbBTC), a token backed by Bitcoin (BTC) on the Ethereum (ETH) blockchain. This move allows BTC holders to access decentralized finance (DeFi) applications on both the Base and Ethereum blockchains.
According to Coinbase, cbBTC is now live onchain and available for use on various DeFi networks such as Aave, Curve Finance, Compound Finance, Moonwell, and Maple Finance. In a detailed blog post, Coinbase explains how Bitcoin holders can leverage the wrapped version of the cryptocurrency to enhance their DeFi experience.
By converting their BTC to cbBTC, users can seamlessly participate in DeFi activities like providing liquidity to protocols or using it as collateral for borrowing other crypto assets. When transferring BTC from Coinbase to an address on Base or Ethereum, it will automatically be converted 1:1 to cbBTC. Likewise, receiving cbBTC in a Coinbase account will be converted back to BTC at a 1:1 ratio.
At the time of writing, Bitcoin is trading at $57,688, showing a 2% gain in the last 24 hours. The introduction of cbBTC aims to streamline the integration of Bitcoin into DeFi applications, offering users more flexibility and opportunities within the decentralized finance space.
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In conclusion, the launch of Coinbase Wrapped Bitcoin opens up new possibilities for BTC holders to engage with DeFi platforms and maximize their cryptocurrency holdings in innovative ways.