How to Use Bitcoin on Ethereum Network

Bitcoin and Ethereum are the two largest blockchain networks, but they operate independently. However, innovative solutions like cbBTC (Coinbase Wrapped Bitcoin) allow you to use Bitcoin's value within Ethereum's rich DeFi ecosystem.

Moai.cash supports cbBTC and other Bitcoin representations on Ethereum, enabling you to access DeFi protocols while maintaining exposure to Bitcoin's price movements.

What is cbBTC?

cbBTC is a tokenized version of Bitcoin created by Coinbase that runs on the Ethereum network. Each cbBTC token is backed 1:1 by actual Bitcoin held in secure custody by Coinbase. This allows Bitcoin holders to participate in Ethereum's DeFi ecosystem without selling their Bitcoin.

Key Features of cbBTC:

1:1 Bitcoin backing: Every cbBTC is redeemable for real Bitcoin
Coinbase custody: Bitcoin reserves are held by a trusted, regulated institution
ERC-20 compatibility: Works with all Ethereum DeFi protocols
Transparent reserves: Coinbase provides regular attestations of Bitcoin holdings

How to Get cbBTC

Method 1: Direct Exchange

The simplest way is to exchange Bitcoin for cbBTC on Coinbase or other supported exchanges. This process involves:

Depositing Bitcoin to your exchange account
Converting Bitcoin to cbBTC at a 1:1 ratio
Withdrawing cbBTC to your Ethereum wallet

Method 2: DeFi Protocols

You can also obtain cbBTC through various DeFi protocols that offer Bitcoin-to-cbBTC conversion services, often with competitive rates and lower fees.

What You Can Do with cbBTC

1. DeFi Lending and Borrowing

Use cbBTC as collateral on lending platforms like Aave or Compound to borrow other assets while maintaining Bitcoin exposure. You can also lend cbBTC to earn yield.

2. Liquidity Provision

Provide cbBTC liquidity to decentralized exchanges like Uniswap or Curve to earn trading fees. Popular pairs include cbBTC/WETH and cbBTC/USDC.

3. Yield Farming

Participate in yield farming protocols that accept cbBTC deposits, earning additional tokens and rewards while maintaining Bitcoin exposure.

4. Trading and Swapping

Trade cbBTC for other Ethereum-based tokens instantly through DEX aggregators, benefiting from Ethereum's superior transaction speed and lower fees compared to Bitcoin network.

Benefits of Using Bitcoin on Ethereum

Faster transactions: Ethereum's 12-second block times vs Bitcoin's 10-minute blocks
Lower fees: Avoid high Bitcoin network fees for smaller transactions
Smart contract functionality: Access programmable money features
DeFi ecosystem: Participate in lending, trading, and yield generation
Composability: Combine with other DeFi protocols for complex strategies

Risks and Considerations

While cbBTC offers significant benefits, consider these factors:

Custodial risk: Coinbase holds the underlying Bitcoin
Smart contract risk: Ethereum-based protocols may have vulnerabilities
Regulatory risk: Changes in regulations could affect cbBTC operations
Liquidity risk: cbBTC markets may have different liquidity than Bitcoin

Getting Started with Moai.cash

Moai.cash makes it easy to work with cbBTC and other Bitcoin representations on Ethereum. Our platform provides:

Simple cbBTC acquisition and management
Integration with major DeFi protocols
Real-time portfolio tracking
Secure wallet infrastructure

Bridge your Bitcoin to Ethereum's DeFi ecosystem with cbBTC and unlock new possibilities for your digital assets while maintaining exposure to Bitcoin's long-term value proposition.