The decentralized finance (DeFi) landscape is undergoing a quiet but powerful shift — one anchored in trust, transparency, and strategic ecosystem growth. As Bitcoin’s price reaches new highs and layer-2 networks expand their influence, the competition between wrapped Bitcoin solutions has intensified. At the heart of this evolution lies the growing rivalry between wBTC and cbBTC, with Base emerging as a pivotal battleground.
This isn’t just about which token better represents Bitcoin on-chain — it's about who users trust with their most valuable digital asset.
The Rise of Wrapped Bitcoin
Wrapped Bitcoin (wBTC) was the pioneer in bridging Bitcoin’s value into the Ethereum ecosystem. Launched in 2019 by BitGo, REN, and Kyber, wBTC allowed BTC holders to participate in DeFi by locking real Bitcoin and issuing ERC-20 tokens pegged 1:1 to BTC.
BitGo served as the primary custodian, ensuring that every wBTC token was backed by actual Bitcoin. Governance was managed through a decentralized autonomous organization (DAO), which controlled merchant access and maintained system integrity.
At its peak, wBTC achieved a market cap exceeding $13 billion, becoming a cornerstone of DeFi lending, liquidity pools, and yield strategies.
But in August 2024, a major turning point occurred: BitGo announced plans to transfer wBTC’s operations to a multi-jurisdictional joint venture linked to Tron founder Justin Sun. This decision triggered widespread concern among institutional investors and DeFi protocols alike.
MakerDAO, one of DeFi’s most influential players, responded by banning wBTC as collateral and reducing its debt ceiling to zero — a clear signal that confidence in wBTC was eroding.
👉 Discover how trusted assets are reshaping DeFi today.
Enter cbBTC: A New Challenger Emerges
As wBTC faced growing skepticism, Coinbase introduced cbBTC — a fully backed, transparently custodied wrapped Bitcoin solution built for the modern DeFi era.
Launched strategically during wBTC’s crisis of confidence, cbBTC quickly gained traction. Within months, its market cap surged past $1.6 billion, according to CoinGecko data.
Unlike wBTC’s decentralized custodian model, cbBTC relies entirely on Coinbase’s institutional credibility. As a publicly traded U.S. company subject to rigorous compliance standards, Coinbase offers an unprecedented level of regulatory oversight and transparency — qualities increasingly valued in today’s risk-conscious crypto environment.
cbBTC is deployed across multiple chains, including Base, Ethereum, Solana, and Arbitrum, reflecting Coinbase’s vision of an interoperable, open financial system. Notably, over 70% of cbBTC supply resides on Ethereum, showing strong adoption beyond Coinbase’s native ecosystem.
But the most significant trend? The rapid concentration of cbBTC on Base, Coinbase’s Layer-2 network built on OP Stack. This isn’t accidental — it's part of a deliberate strategy to fuel Base’s growth by injecting high-quality Bitcoin liquidity directly into its DeFi stack.
cbBTC vs wBTC: Market Share in Motion
The battle lines are being drawn in real time — and the data tells a compelling story.
On Aave, one of DeFi’s largest lending platforms, cbBTC’s market share soared from 3% to 17% in just a few months. Meanwhile, wBTC’s dominance has steadily declined.
Why such a rapid shift?
1. Platform Incentives
Aave launched a performance rewards program in October 2024, offering additional incentives for users who deposit cbBTC as collateral to borrow USDC. This simple economic nudge accelerated capital migration from wBTC to cbBTC.
2. Trust Erosion Around wBTC
Market pricing reflects sentiment — and wBTC is now trading at its deepest discount to BTC since the FTX collapse. According to Kaiko data, the wBTC/BTC spot spread hit multi-year lows after BitGo’s announcement, signaling weakening confidence.
3. Exchange Support
Coinbase further weakened wBTC’s position by announcing its delisting of wBTC on December 19, citing non-compliance with its listing standards. Given Coinbase’s influence as both an exchange and custodian, this move sent shockwaves through the wrapped Bitcoin market.
Why Base Could Be the Real Winner
While much attention focuses on the cbBTC vs wBTC duel, the bigger narrative may be about Base’s strategic positioning.
Base has seen massive net inflows — nearly $1 billion in one month alone — outpacing other major blockchains. While meme coins on Solana grab headlines, Base is quietly building a robust, institutional-grade ecosystem.
cbBTC plays a crucial role here. By bringing native Bitcoin liquidity to Base, it enables:
- DeFi protocols to offer BTC-backed lending and yield opportunities
- Liquidity providers to earn fees using trusted BTC derivatives
- Developers to build innovative BTCfi (Bitcoin finance) applications
We’re already seeing protocols like Moonwell integrate cbBTC as a blue-chip asset, reinforcing Base’s status as a destination for secure capital deployment.
Moreover, recent activity from Vitalik Buterin — who purchased $ANON, a social token tied to Farcaster — has reignited interest in Base’s social layer. When combined with strong financial infrastructure like cbBTC, this creates a powerful flywheel: social engagement drives user growth; financial tools drive value accumulation.
👉 See how top ecosystems are merging social and finance.
FAQ: Your Questions Answered
Q: What is wrapped Bitcoin?
A: Wrapped Bitcoin (like wBTC or cbBTC) is a tokenized version of Bitcoin that operates on other blockchains (e.g., Ethereum or Base). It’s backed 1:1 by real Bitcoin and allows BTC holders to use their assets in DeFi applications such as lending, borrowing, and trading.
Q: Is cbBTC safer than wBTC?
A: Many investors believe so. cbBTC benefits from Coinbase’s status as a regulated U.S. company with strict compliance practices. In contrast, concerns have grown around wBTC due to its planned transfer to a Tron-affiliated entity.
Q: Can I use cbBTC outside of Base?
A: Yes. cbBTC is available on Ethereum, Solana, Arbitrum, and Base, making it one of the most interoperable wrapped Bitcoin tokens today.
Q: Does cbBTC earn yield automatically?
A: No. Like other wrapped tokens, cbBTC itself doesn’t generate yield. However, you can use it as collateral in DeFi protocols like Aave or deposit it into liquidity pools to earn returns.
Q: Why is Base gaining so much traction?
A: Base combines low transaction fees (thanks to its Optimism-based rollup architecture) with strong backing from Coinbase and growing DeFi utility via assets like cbBTC. Its integration with Farcaster also positions it uniquely at the intersection of social and financial innovation.
Q: Will wBTC disappear?
A: Not immediately. Despite declining trust, wBTC still has significant liquidity and historical usage across DeFi. However, unless governance and custody concerns are addressed, its long-term relevance may continue to fade.
👉 Explore the future of cross-chain asset utility.
The Road Ahead
The wrapped Bitcoin race is far from over — but momentum is clearly shifting.
cbBTC represents more than just another token; it symbolizes a new standard for trust in DeFi. Backed by institutional-grade custody and deployed across leading chains, it meets the evolving demands of both retail and professional investors.
For Base, cbBTC could be the catalyst that transforms it from a promising L2 into a dominant DeFi hub. With increasing inflows, developer activity, and high-quality asset integration, Base is no longer just “Coinbase’s chain” — it's becoming a central node in the next-generation crypto economy.
Yet competition will only intensify. As BTCfi evolves, we may see new entrants leveraging zero-knowledge proofs, native Bitcoin smart contracts (e.g., Stacks), or decentralized custody models to challenge both wBTC and cbBTC.
In this dynamic environment, one truth remains constant: trust is the new collateral.
Investors and builders must stay alert — monitoring not just price movements, but shifts in governance, custody models, and ecosystem incentives. Those who adapt quickly will be best positioned to thrive in the next chapter of decentralized finance.
Keywords: cbBTC, wBTC, Base chain, wrapped Bitcoin, DeFi, BTCfi, Coinbase, Bitcoin liquidity