Coinbase’s recently launched cbBTC is increasing its liquidity on decentralized networks. Aerodrome, a growing underlying exchange, holds the majority of cbBTC liquidity.
Trading activity and liquidity have started to pick up for cbBTC, a new variant of wrapped Bitcoin (BTC). In the first week of launch, the new asset used Aerodrome DEX for the majority of its trading activity. The new asset was one of the first to be immediately launched on the L2 blockchain with its own version.
Aerodrome started using cbBTC from the first day it became available for trading and now accounts for over 78% of all activity. The exchange has even surpassed Uniswap, which is still the leading liquidity hub and DEX on Base.
Aerodrome is currently a relatively smaller holder of cbBTC, but the high volume activity is driven by its approach to high liquidity pairs. Otherwise, the Uniswap V3 wallet will hold 50% of the token supply, with another 10% still owned by Coinbase.
cbBTC market share is gradually increasing
Shortly after the launch of the new asset, there are 1008 cbBTC on Ethereum and 727 cbBTC on Base. Ethereum coins have removed 69 cbBTC through burning, although the supply is still gradually changing. Both versions are native to their respective blockchains and have separate smart contracts for Base And Ethereum. Users of the Coinbase app will be able to connect BTC directly from their wallet and use it on another chain without additional packaging and connection steps.
The launch of cbBTC immediately created a new source of flows on L2, the recipient of which is currently only Base. The new wrapped asset is intended to replace other forms of wrapped BTC, but especially to compete with WBTC, the most widely accepted coin.
Got a new asset 1.9% market share in the first week of its launch in a market where several organizations attempted to offer packaged BTC with varying levels of risk.
The new asset is also just spreading across the DEX space. As of September 16 top holders include Coinbase, Uniswap and Aerodrome Finance. Influxes and activity also come from 1Inch and Wintermute.
According to Nansen’s research, Wintermute was the largest market maker in the first week of cbBTC’s launch. Currently, cbBTC activity may be driven by high trading volumes to support pairs with maximum liquidity and may not reflect the number of users or actual demand. This initiative on the part of market makers can also help strengthen Aerodrome’s position.
cbBTC activity was not reflected among smart wallet users. The base usually has a smart wallet worth from 2 to 5 thousand. users weekly.
Currently, cbBTC activity may be associated with large market makers and liquidity providers with limited mass adoption. Coinbase also had experience with wrapped Ethereum (cbETH).
The cbBTC/WETH pair is one of the most active. $28.48 million liquidity is blocked. The volume of purchases exceeds sales, activity amounted to about $19.06 million in 24 hours.
Actual wallet adoption remains slow and cbBTC is still not a major DEX asset for adoption. The token has only reached 356 wallets since its launch. The asset is currently held primarily in liquidity pools, although cryptocurrency influencers are also starting to buy it.
Blockchain Base is currently showing peak activity, but actual cbBTC users may only make up a small portion. There are also bots and Sybill accounts on the network that mainly focus on meme tokens.
cbBTC aims to displace other assets
Over the years, BTC has been a staple of decentralized trading due to its value and the liquidity of external markets. With the expansion of DeFi lending, using BTC for loans or collateral is also becoming attractive.
Coinbase’s approach adds a layer of centralization as the sole custodian of the underlying BTC. However, a composite network asset that can be easily used on Uniswap and other DEXs is seen as a compromise. The new token is also intended to replace WBTC due to fears of uncertain ownership after October 8th.
One of the first tasks of cbBTC will be to replace the loans and collaterals of the Sky ecosystem, which are denominated in WBTC. The proposal to switch to a new asset is still under consideration. discussion stage and was not reflected in the minting or activities of cbBTC.
Cryptopolitical report by Kristina Vasilyeva
