Layer 2 Network Base Set To Shine As Coinbase Launches cbBTC

Layer 2 Base is set to enjoy increased network activity following Coinbase’s launch of its new Bitcoin wrapper, cbBTC. This crypto exchange announced that the cbBTC token will be offered on Base, opening up a world of possibilities for Bitcoin holders on the layer 2 network. This development comes amid the network’s recent milestone, in which it surpassed Arbitrum and Ethereum in daily transactions.

Layer 2 Base To Gain More Traction With cbBTC Launch

Base is set to gain more traction following the launch of Coinbase’s wrapped Bitcoin, cbBTC. Coinbase’s announcement noted that the wrapped BTC token will be supported on the layer 2 network and Ethereum. cbBTC, an ERC20 token, will be backed 1:1 by Bitcoin held by the crypto exchange. The announcement highlighted how it will give BTC holders more economic freedom in how they use their holdings.

This development is expected to increase liquidity and engagement on Base as Bitcoin holders explore the decentralized finance (DeFi) landscape on the layer 2 network. They will provide their BTC as liquidity to these DeFi protocols and use their holdings to borrow other crypto assets. Decentralized protocol Aave already proposed to onboard cbBTC on its platform, meaning that Base could witness an influx of BTC holders looking to take advantage of the protocol’s lending and borrowing functionalities.

The cbBTC token will also be available on other lending platforms, such as Compound, Morpho, Moonwell, and Spark. Decentralized exchanges (DEXs) Curve and Aerodome will also enable support for the wrapped token, attracting Bitcoin holders to the Layer 2 Base as they look to take advantage of these exchanges’ offerings. Other DeFi apps that will enable support for the token include Mellow, Veda, DeBridge, DeFinitive, and Chronicle Labs, among others.

Base Ahead Of Arbitrum And Optimism

The launch of cbCBTC on Base provides a huge boost for the network in the layer 2 race as it continues to edge out the likes of Arbitrum and Optimism. Data from Dune Analytics shows that Base has been outperforming these layer 2 networks and Ethereum in weekly transactions since July 22. Coinbase’s L2 network witnessed weekly transactions of over 20 million during this period, while the other networks recorded lower figures.

Layer 2 Base also leads the way in weekly new users, indicating that the network is enjoying greater adoption than these other Ethereum scaling networks. Interestingly, the Coinbase L2 network recorded almost 3.5 million weekly new users on September 2, while Arbitrum and Optimism witnessed 227,309 and 125,931 new users, respectively. It is worth mentioning that Base is also way ahead in weekly active users.