Tweets from the cryptocurrency exchange and Jesse Pollak, the creator of Base, suggest that cbBTC might be run with the blockchain layer 2.
- Recent posts about X by Coinbase and Base creator Jesse Pollak suggests that the crypto exchange is working on a wrap bitcoin similar to BitGo’s WBTC that runs on the layer 2 blockchain.
- Despite some debates over the wBTC protocol, BitGo’s protocol is steady.
The cryptocurrency exchange Coinbase (COIN) seems to be working on an alternate to BitGo’s wrap bitcoin wBTC (WBTC) that runs within its very proprietary Layer-2 Blockchain called Base. It will bring users with a means of gaining access to the most popular cryptocurrency in terms of values on its blockchain.
There was speculation triggered by the cryptic posts posted by Coinbase late on Tuesday U.S. time. The posts were accompanied by the words: “cbBTC” and “Coming shortly.”
The news was followed by a blog post by Jesse Pollak, who runs Base and Base’s operations, describing what the team is planning to do to create the “massive cryptocurrency economy” via the blockchain.
Wrapping a cryptocurrency token is a method to make it available in different protocols than the one that it was designed to be which will rise the liquidity of the intended ecosystem. Each bitcoin wrapped represents one of the original which is kept in custody. If a trader would like to exchange the token in bitcoin, the wrap version will be “burnt,” or deleted from the chain, and the initial is released.
Coinbase’s announcement coincides with a cloud hanging over wBTC. The month before, BitGo said it was creating an joint partnership that will be a part of BiT Global, a Hong Kong-registered custodial platform that is controlled by the Tron ecosystem as well as Tron its founder Justin Sun. The joint venture, alike to the company will continue to utilize the same BitGo multisignature system as well as large cold storage.
The reaction in response to this announcement has been mostly neutral since there is no change in the technical aspects of the product, and all information about reserves’ origins remains valid through the chain. A few discussions in the forum of stablecoin issuer MakerDAO However, expressed a negative response. A executive plan that MakerDAO token holders suggests to end wBTC borrowing and reduce wBTC borrowing limits down to zero DAI in order to lower risk. The proposal is available for the upcoming month.
However, data from the on-chain of Dune indicates that there’s been no changes in the supply for wBTC. This means traders aren’t trying to leave the protocol in mass.
in a blog post in X, Sun stated that there would be “no modifications regarding WBTC” beyond the joint venture. Sun also said that Sun is not in control of the protocol’s private keys, and can’t transfer or transfer any BTC reserves.
“My private involvement with WBTC is totally strategically oriented,” he wrote.
