Monad's cbBTC bridge may add $5B in Bitcoin-backed liquidity

Chainlink has enabled transfers of Coinbase’s wrapped Bitcoin token, cbBTC, from Base to the Monad blockchain utilizing its Cross-Chain Interoperability Protocol, enabling much than $5 cardinal worthy of cbBTC to determination into the Monad ecosystem.

According to Monday’s announcement from Monad, the integration brings cbBTC into the Monad DeFi ecosystem, wherever a bevy of applications, including Curvance and Neverland, are adopting cbBTC markets.

The determination introduces Bitcoin-backed liquidity to lending, borrowing, and different decentralized concern (DeFi) applications connected Monad, an EVM-compatible layer-1 blockchain designed for high-throughput trading and fiscal usage cases.

“As Bitcoin-backed assets turn into the tens of billions, the infrastructure moving them has to conscionable that scale,” said William Reilly, caput of strategical initiatives astatine Chainlink Labs. CCIP was built with aggregate layers of decentralized validation to trim cross-chain risks and support accordant 1:1 backing crossed networks, helium added.

Monad touts throughput of up to 10,000 transactions per 2nd and sub-second finality, positioning itself arsenic infrastructure for transaction-intensive fiscal applications.

Coinbase launched cbBTC successful September 2024 arsenic a wrapped Bitcoin token connected Ethereum and Base, backed 1:1 by BTC held successful custody and designed to automatically mint and redeem against Bitcoin deposits connected the exchange.

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New products purpose to marque Bitcoin a yield-bearing asset

Unlike proof-of-stake networks specified arsenic Ethereum (ETH) and Solana (SOL), wherever users tin gain rewards by staking tokens, Bitcoin’s proof-of-work plan does not natively make yield. That constraint has historically constricted onchain income options for holders of the biggest cryptocurrency, but caller fiscal structures person started to code the gap.

In May, Solv Protocol co-founder Ryan Chow said demand for Bitcoin output strategies is accelerating, peculiarly among companies seeking liquidity without selling Bitcoin. He pointed to proof-of-stake integrations and delta-neutral trading strategies arsenic expanding ways Bitcoin tin make returns portion supporting web information and liquidity.

That aforesaid month, Coinbase launched the Coinbase Bitcoin Yield Fund targeting 4% to 8% yearly nett returns for organization investors extracurricular the US. About a period later, Kraken introduced a Bitcoin staking product done an integration with Babylon Labs, allowing users to fastener up their BTC and delegate it to unafraid proof-of-stake networks without bridging oregon wrapping.

Wrapped Bitcoin has besides continued to grow crossed networks. In November, WBTC integrated with the Hedera network with enactment from BitGo and LayerZero, extending the largest tokenized mentation of Bitcoin into different astute declaration ecosystem.

Last week, Telegram’s built-in TON Wallet added vaults enabling users to earn output connected Bitcoin wrong the messaging app done underlying decentralized concern infrastructure.

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