Coinbase has recently launched wrapped tokens for Cardano (cbADA) and Litecoin (cbLTC) on its Base layer-2 network, as announced in a post on June 25. These synthetic tokens are backed 1:1 by the actual assets held in Coinbase custody, with proof-of-reserves pages showcasing the on-chain addresses securing the collateral. Currently, there are 11,364 LTC and 2,963,259.36 ADA issued on Base via Coinbase.
This release comes after the activation of Dogecoin (cbDOGE) and XRP (cbXRP) wrapped tokens earlier in June, completing the four-asset bundle that was previewed in May. In addition to ADA and LTC, Coinbase also offers synthetic versions of Bitcoin (cbBTC) and liquid staking tokens for Ethereum (cbETH). Data from Dune Analytics indicates steady growth in circulating supply and transfer volume for these tokens since their introduction.
As of June 23, cbBTC holds 24% of the synthetic BTC market, while cbETH represents 7% of all ETH in staking. Furthermore, Base is recognized as the second-largest layer-2 for Ethereum, with over $12 billion secured, according to L2Beat data.
In terms of custody structure and liquidity plans, Coinbase ensures that ADA and LTC deposits are kept in segregated cold storage wallets with the same controls applied to cbETH and cbBTC reserves. The exchange mints cb-tokens only after verifying incoming on-chain deposits and burns them when users redeem for native assets. Liquidity incentives on Base decentralized exchanges are expected to mirror the cbETH model, with quarterly attestations covering all synthetic assets issued under the Coinbase Wrapped label.
The new tokens adhere to the existing smart contract template that has been audited for cbETH. During an introductory period aimed at seeding the supply, Coinbase will not impose conversion fees. With cbADA and cbLTC now in circulation, Base users have access to ERC-20 gateways for six of the top ten largest non-stablecoins by market capitalization. Coinbase’s custody unit will continue to manage redemptions and monitor collateral balances in real-time.
In conclusion, the introduction of wrapped tokens for Cardano and Litecoin on Coinbase’s Base layer-2 network expands the platform’s offerings and provides users with more options for accessing and utilizing these assets in a secure and transparent manner.