Quick overview

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Coinbase unveiled two new “wrapped” tokens, allowing traders to use Dogecoin and XRP on DeFi protocols. The platform aims to meet the growing demand for cross-chain functionality in the complex DeFi landscape with cbDOGE and cbXRP.

The American listed exchange is leveraging its Ethereum layer-2 Base network to make these new offerings available.

Marcus Hardt, the CEO of the DeFi app Balancer Labs, emphasized that cbDOGE and cbXRP represent a smart strategy to boost user engagement and unlock new liquidity. A Coinbase representative stated: “The introduction of cbDOGE and cbXRP on Base makes trading more accessible to all users and enables customers to utilize the assets they currently own in new ways.”

Applications in the cryptocurrency sector that aim to automate actions like lending or borrowing, eliminating intermediaries and centralized authorities, are collectively known as decentralized finance, or DeFi.

DeFi’s launch aligns with a broader movement into the mainstream. President Trump endorsed a decentralized finance initiative in what was once a complicated and unregulated market. Traders looking to utilize Bitcoin or other digital tokens in DeFi may face challenges since these applications often run on Ethereum.

Wrapped Bitcoin (WBTC) on Ethereum is the most popular solution, attempting to address this issue. However, many wrapped tokens are emerging as the blockchain industry expands.