Coinbase has opted to capitalize on the recent controversies surrounding WBTC’s decision to bring Justin Sun on board to launch its own wrapped bitcoin initiative, Coinbase Wrapped BTC (cbBTC).
This new digital asset is available on both the Ethereum network and Coinbase’s proprietary Base network. In its order books, Coinbase will treat it as equivalent to standard BTC, allowing users to acquire cbBTC by withdrawing Bitcoin on either Ethereum or Base, which will trigger an automatic conversion.
According to Coinbase’s official website, this asset is already compatible with various platforms across the Decentralized Finance (DeFi) ecosystem, including Aerodrome, Curve, Aave, Compound, Spark, and more.
As noted by CoinMarketCap, the current market capitalization for this token stands at approximately $100 million.
cbBTC, WBTC, and Bitcoin-on-Tron
Read more: MakerDAO suspends WBTC borrows after Justin Sun’s involvement comes to light
The competitor to cbBTC, WBTC, has come under increased scrutiny following the announcement of Sun and the advisory role of BiT Global, a custodian, in the project.
This development has prompted some DeFi platforms, including Maker, to reconsider the treatment of WBTC within their protocols, largely due to concerns regarding Sun’s trustworthiness.
Justin Sun took to X to express his discontent with this new rival, criticizing cbBTC for lacking Proof of Reserve, no audits, and the ability to freeze users’ balances at will. He stated, “It’s essentially a ‘trust me’ situation. Any U.S. government subpoena could seize all your BTC. This is the epitome of central bank Bitcoin. It’s a dark day for BTC.”
It’s quite ironic for Sun to adopt this position, given the Bitcoin on Tron product associated with Poloniex, a crypto exchange he owns.
Previously, Sun had promised that Poloniex would implement a ‘proof-of-reserves’ feature, yet he has not fulfilled that commitment in the almost two years since it was made.
Furthermore, Poloniex provides its variant of wrapped bitcoin, often referred to as ‘Bitcoin-on-Tron’, which significantly surpasses WBTC on Tron in scale. Protos has attempted to contact Poloniex regarding the storage of the bitcoins for this product, but Poloniex declined to share that information.
Despite these concerning transparency issues, HTX (formerly Huobi), which is under Sun’s advisement, holds over half of its existing bitcoin reserves in this Poloniex-offered product.
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