Coinbase has expanded the functionality of its Layer 2 network, Base, by introducing wrapped versions of XRP and Dogecoin. These new tokens, designated as cbXRP and cbDOGE, are fully backed one-to-one by their native counterparts, enabling users to seamlessly engage with decentralized finance (DeFi) applications directly on Base.
This integration is a significant step in increasing the cross-chain utility and accessibility of major cryptocurrencies. By bringing these assets onto Base, Coinbase aims to reduce barriers to DeFi participation, allowing users to leverage XRP and DOGE in various on-chain financial activities without needing to bridge or convert them across multiple networks.
What Are Wrapped Tokens?
Wrapped tokens are blockchain assets that represent another cryptocurrency on a different network. They are “wrapped” or backed by reserves of the original asset, ensuring that their value remains pegged 1:1. This mechanism allows non-native tokens to operate within ecosystems where they aren’t natively supported—such as using Bitcoin on Ethereum-based DeFi platforms.
With cbXRP and cbDOGE, users can now utilize these popular cryptocurrencies across the growing suite of DeFi services on Base, including lending, borrowing, and liquidity provision.
Benefits of Using cbXRP and cbDOGE on Base
The introduction of these wrapped tokens brings several advantages:
- DeFi Accessibility: Users can now participate in Base’s DeFi landscape using XRP and DOGE.
- Reduced Transaction Costs: Conduct transactions at lower fees compared to mainnet operations.
- Faster Processing: Benefit from the high throughput and quick finality of the Base network.
- Interoperability: Enhance cross-chain utility without complex bridging mechanisms.
This effort aligns with Base’s broader vision of creating a more open and user-friendly on-chain economy.
Upcoming Expansions: cbLTC and cbADA
Coinbase has also confirmed that wrapped versions of Litecoin (cbLTC) and Cardano (cbADA) are currently in development. These assets are expected to join the Base ecosystem in the near future, further broadening the range of cryptocurrencies available for DeFi applications.
This continuous expansion highlights Coinbase’s commitment to increasing the variety of digital assets accessible within its Layer 2 environment.
The Broader Impact on DeFi and Cross-Chain Utility
The integration of major cryptocurrencies like XRP and DOGE into Base is more than a technical upgrade—it represents a strategic effort to merge traditional crypto assets with modern DeFi infrastructures. This approach not only brings liquidity and users into the ecosystem but also encourages broader adoption of decentralized finance.
As more assets become available in wrapped form, users gain flexibility while maintaining the value and utility of their original holdings.
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Frequently Asked Questions
What are wrapped tokens?
Wrapped tokens are digital assets that represent another cryptocurrency on a different blockchain. They are backed 1:1 by the original asset, allowing them to be used in ecosystems where the native token isn’t supported.
How do I use cbXRP and cbDOGE on Base?
You can use these wrapped tokens in any supported DeFi application on the Base network. This includes decentralized exchanges, lending platforms, and yield farming protocols.
Are wrapped tokens safe?
When issued by reputable organizations like Coinbase, wrapped tokens are generally considered secure. They are fully backed by reserves, ensuring redeemability and value stability.
What other wrapped assets are coming to Base?
Coinbase has announced that wrapped Litecoin (cbLTC) and wrapped Cardano (cbADA) are currently under development and will be launched on Base soon.
Can I convert wrapped tokens back to the original asset?
Yes, wrapped tokens can typically be redeemed for the original cryptocurrency through the issuing platform or supported exchanges.
Why is Base adding support for more wrapped assets?
Base aims to improve interoperability and accessibility in DeFi. Adding more wrapped assets allows users to engage with a wider range of cryptocurrencies without leaving the network.