Coinbase introduces cbBTC to Solana, community looks forward to inspiring more DeFi activities
US cryptocurrency exchange Coinbase announced on Thursday that its wrapped Bitcoin cbBTC (Coinbase Wrapped BTC) has been launched on the Solana blockchain, allowing users to transfer this SPL token supported by Bitcoin 1:1 between the exchange and Solana wallet. The company stated that cbBTC is currently available on over 11 trading platforms built on Solana, including Raydium, Orca, Jito, and Jupiter.
Coinbase launched cbBTC in September this year, initially only supporting Ethereum memory blockchain and Coinbase supported Base network, and promised to support more types of chains in the future. However, cbBTC traders who transfer Bitcoin to Base have an advantage over traders who transfer Bitcoin to Solana. Transferring Bitcoin from Coinbase to Base is free, while transferring Bitcoin from Coinbase to Solana costs $0.04.
Some people in the crypto community believe that Coinbase's measures have the potential to fill the Bitcoin gap left in Solana's decentralized finance (DeFi) ecosystem after the collapse of the FTX exchange two years ago. Since the mysterious disappearance of the Solana ecosystem packaging Bitcoin soBTC, there have been no similar Bitcoin products on DeFi on Solana. It is widely believed that soBTC is controlled by FTX, and the price of the token collapsed as FTX filed for bankruptcy in November 2022, significantly decoupling from the price of Bitcoin.
Raydium contributor InfraRay stated that Coinbase's native issuance of cbBTC on Solana "halved the risk profile". Chris Heaney, co-founder of Solana's ecological trading protocol Drift, stated that better packaging of Bitcoin liquidity has many indirect impacts on Solana's DeFi ecosystem, which can promote the liquidity of BTC-PERP (Bitcoin Perpetual Contract) because it allows basis traders to arbitrage capital rates on a larger scale.
It remains to be seen whether Coinbase can successfully turn cbBTC into Solana's standard alternative to Bitcoin. Other companies' efforts in this area seem to have failed, with 21BTC issued by 21.co having less than $1.5 million in circulation in Solana DeFi, and Threshold's tBTC not performing well either.
According to on chain data, Coinbase has nearly $10 million worth of cbBTC ready to deploy in Solana's DeFi ecosystem, and an additional $500000 worth of cbBTC is already flowing in trading pools on Meteora and Orca, and is stored in reserves on trading protocol Kamino.
A Coinbase spokesperson said, "The utility of releasing BTC for our customers throughout the on chain economy is the core reason we launched cbBTC. Expanding support to Solana and potentially other chains gives our customers more choices and aligns with our overall strategy of bringing billions of users to the chain
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