Coinbase Introduces Wrapped XRP and DOGE on Ethereum Layer-2 Network Base

Amid surging demand for cross-chain DeFi capabilities, American crypto giant Coinbase announced this week the launch of two new wrapped tokens for its Base Ethereum layer-2 network.

Key Details

New wrapped tokens: cbDOGE and cbXRP.
Platform: Coinbase’s Ethereum-based Base network.
Purpose: Enable users to employ their existing XRP and Dogecoin holdings as collateral on DeFi protocols.

Context & Company Comments

Coinbase stated the launch expands the utility of existing assets within the Base ecosystem, telling Decrypt that users can now “use the assets they already hold in new ways and makes trading more accessible to everyone.”

Industry observers highlighted that the move addresses growing demand within the complex DeFi world.

“Bringing cbDOGE and cbXRP into the ecosystem is a smart way to get more users involved and unlock new liquidity,” Marcus Hardt, CEO of DeFi app Balancer Labs, told Decrypt.

Decentralized finance (DeFi), represented by applications automating borrowing or lending using smart contracts, often requires interactions outside the user’s primary crypto holding. The Base network update facilitates this.

Wrapped tokens, like Wrapped Bitcoin (WBTC), are established mechanisms for representing other cryptocurrencies on a different blockchain, here bridging XRP and Dogecoin to Ethereum/DeFi.

Significance

The launch is part of a broader trend integrating meme coins and specialized assets into DeFi. XRP and Dogecoin are established, respectively, as the 5th and 8th largest cryptocurrencies by market capitalization.

CEO Sam Mudie of Savea acknowledged Coinbase’s capability to efficiently integrate these coins, potentially setting a precedent for other large-cap integrations.

Control and Dependency

However, because Coinbase controls the issuance, minting, burning, and smart contracts of these new tokens, some DeFi proponents express concerns.

“Coinbase controls the issuance, minting, burning, and smart contracts, without involvement from independent entities or the broader community,” Flare Research’s Max Luck noted.