Coinbase has introduced new wrapped tokens, cbDOGE and cbXRP, on its Ethereum layer-2 network called Base, allowing users to trade their Dogecoin and XRP. This move is intended to meet the rising demand for cross-chain functionality in decentralized finance (DeFi) by enabling users to use these popular cryptocurrencies as collateral in DeFi protocols. Coinbase maintains 1:1 reserves for these wrapped assets. The launch is part of a broader push towards making DeFi more accessible, with industry observers noting it can enhance liquidity and draw more users into the ecosystem. However, concerns have been raised regarding Coinbase’s control over the issuance and management of these tokens, highlighting a tension between decentralization and the centralized nature of the exchange. As DeFi gains traction in mainstream finance, including endorsements from notable figures, the introduction of these tokens signifies potential growth in the sector and a shift towards a more integrated blockchain universe.

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