Coinbase Launches cbADA on Ethereum Layer 2 Base for DeFi Access

Coinbase has launched a wrapped version of Cardano's native token, ADA, on the Ethereum Layer 2 chain, Base. This new token, named cbADA, is designed to unlock decentralized finance (DeFi) opportunities for ADA holders by connecting the Cardano network to popular decentralized exchanges such as Uniswap, PancakeSwap, and Aerodrome.

According to Coinbase Assets’ official post, cbADA is fully backed 1:1 by ADA held in Coinbase custody, with transparent proof-of-reserves. This ensures that users can trade, lend, and provide liquidity on DeFi platforms that are not natively supported by Cardano. The introduction of cbADA simplifies the process for users to experiment with DeFi applications outside of the Cardano network by wrapping ADA into an ERC-20 token. This move is part of Coinbase's broader strategy to create unified liquidity across different blockchains, following the previous launches of cbETH and the recently introduced cbLTC for Litecoin.

The Cardano ecosystem continues to thrive with the recent Midnight Glacier airdrop, which has garnered significant attention, with over 200,000 mentions on X within a week. This airdrop encourages users to engage with the Cardano network to redeem NIGHT tokens, thereby boosting on-chain activity. Despite a decline in daily active users to approximately 20,000 from 54,000 earlier in the year, the market sentiment remains bullish. The odds on Cardano ETF approval on Polymarket have reached 79%, the highest yet.

With cbADA now live on Base, ADA owners can access the burgeoning Ethereum DeFi ecosystem, adding a new dimension to the overall Cardano ecosystem. This development is expected to enhance the utility and liquidity of ADA, providing holders with more opportunities to participate in the DeFi space.