Coinbase’s newly launched wrapped Bitcoin product, cbBTC, has seen fast adoption inside its first 24 hours, with a market capitalization nearing $100 million.
Data from Dune Analytics exhibits the circulating provide of cbBTC has reached 1,720 tokens, valued at $99.8 million. Of this, 43% is on Base, whereas 57% resides on Ethereum.
Base’s DeFi progress
Trade analysts have famous that Coinbase’s cbBTC progress may considerably increase DeFi actions on the trade’s layer-2 community, Base.
Luke Youngblood, a contributor to Moonwell DeFi, highlighted the product’s influence. He pointed out that cbBTC’s fungibility with Bitcoin on Coinbase would allow retail BTC holdings exceeding $20 billion and institutional holdings over $200 billion to seamlessly combine with Base’s on-chain ecosystem.
Nansen CEO Alex Alealso praised the token’s fast adoption and predicted that it might considerably enhance whole belongings on the Base community.
Additional, He shared that Coinbase presently holds about 36% of the provision, whereas market maker Wintermute ranks among the many high holders. Svanevik remarked:
“[It appears] Wintermute is the #1 market maker. [It will] be a solid business for them.”
Solar FUDs cbBTC
Despite cbBTC’s early success, not everyone seems to be optimistic.
TRON founder Justin Solar voiced skepticism, dubbing cbBTC “central bank BTC” due to its lack of Proof of Reserve audits and potential authorities intervention.
He acknowledged:
“cbbtc lacks Proof of Reserve, no audits, and can freeze anyone’s balance anytime. Essentially, it’s just ‘trust me.’ Any US government subpoena could seize all your BTC. There’s no better representation of central bank Bitcoin than this. It’s a dark day for BTC.”
Solar additional claimed that integrating cbBTC into DeFi may introduce safety dangers, as authorities subpoenas may immediately freeze on-chain Bitcoin, undermining decentralization. He said:
“I’m friends with many DeFi protocol founders, but integrating cbbtc will pose major security risks to decentralized finance. A single government subpoena could freeze on-chain Bitcoin instantly, making decentralization a joke.”
Some have urged Sun’s criticisms could stem from considerations that Coinbase’s cbBTC may encroach available on the market share of BitGo’s WBTCa undertaking with which Solar has ties. Notably, his involvement with WBTC has sparked debate throughout the crypto group, as some now search options.
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