As a seasoned analyst with years of experience in the crypto space, I can confidently say that the launch of Coinbase’s cbBTC on Layer 2 Base is a game-changer. Having closely observed the evolution of various blockchain networks, I must admit that this development puts Base ahead of its peers, particularly Arbitrum and Optimism.
The Layer 2 Base network is looking forward to an uptick in network activity as Coinbase introduces its new Bitcoin encapsulation, cbBTC. Coinbase has revealed that the cbBTC token will be accessible on Base, potentially providing a myriad of opportunities for Bitcoin owners utilizing the layer 2 platform. This move follows a significant achievement by the network: surpassing Arbitrum and Ethereum in daily transactions.
Layer 2 Base To Gain More Traction With cbBTC Launch
The Base platform is expected to see increased popularity after Coinbase unveiled its wrapped Bitcoin (cbBTC). According to Coinbase, this token is tied to Bitcoin and can be utilized on Ethereum’s layer 2 network. cbBTC functions as an ERC-20 token, with each token representing a corresponding amount of Bitcoin held securely by the cryptocurrency exchange. This move aims to provide Bitcoin holders with greater flexibility in managing their assets economically.
As a researcher delving into this subject, I anticipate that this advancement will spur greater liquidity and interaction on the Base platform as Bitcoin (BTC) owners traverse the decentralized finance (DeFi) terrain within the layer 2 network. They intend to contribute their BTC as liquidity to these DeFi protocols and leverage their assets to borrow various cryptocurrencies.
On top of the cbBTC token being accessible on lending platforms like Compound, Morpho, Moonwell, and Spark, it’s also set to appear on decentralized exchanges (DEXs) such as Curve and Aerodome. The support for the wrapped token on these platforms could draw Bitcoin holders towards Layer 2 Base as they explore the benefits provided by these exchanges. Furthermore, various DeFi applications like Mellow, Veda, DeBridge, DeFinitive, Chronicle Labs, and others will also offer compatibility with this token.
Base Ahead Of Arbitrum And Optimism
Introducing cbCBTC on Base significantly bolsters the network’s position in the layer 2 competition, consistently outpacing competitors like Arbitrum and Optimism. As per Dune Analytics, Base has been dominating these layer 2 networks and Ethereum in terms of weekly transactions since July 22. During this period, Coinbase’s L2 network handled over 20 million weekly transactions, whereas the other networks saw lower transaction volumes.
In terms of weekly sign-ups, Layer 2 Base is taking the front seat among Ethereum scaling networks, suggesting a higher level of network adoption compared to its counterparts. On September 2 alone, Coinbase’s L2 network registered nearly 3.5 million new users, whereas Arbitrum and Optimism reported 227,309 and 125,931 new users respectively. Notably, Base is also leading in the area of weekly active users.
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2024-09-12 17:49