Nearly two years after FTX's collapse impacted Solana's decentralized finance (DeFi) sector, Coinbase is attempting to reintroduce bitcoin-based trading to the Solana blockchain with its new token, cbBTC.
Launched recently, cbBTC is a bitcoin-backed token that users can transfer between their Coinbase accounts and Solana wallets, allowing easier bitcoin transactions within Solana's DeFi ecosystem.
Solana DeFi Eyes cbBTC as Bitcoin Solution
Solana's DeFi sector has lacked a reliable bitcoin token since FTX’s downfall in November 2022, which rendered soBTC—widely used on Solana—unavailable.
This absence created a disadvantage for Solana compared to Ethereum, which offers multiple options for bitcoin-backed tokens in its DeFi landscape. Coinbase's cbBTC aims to fill this gap, with contributors across Solana-based platforms expressing optimism that the token could become the go-to bitcoin substitute on Solana.
Bitcoin ???? Solana@Coinbase has officially launched cbBTC on Solana — bringing more of Bitcoin’s value to Solana’s thriving DeFi ecosystem. pic.twitter.com/VKbPJc5s73
— Solana (@solana) November 7, 2024
One notable Solana contributor said there is "much higher hope" for cbBTC's success, especially as bitcoin prices surge.
Coinbase’s move to issue cbBTC directly on Solana could also reduce risk, according to InfraRay, a contributor at Solana-based decentralized exchange Raydium. InfraRay explained that cbBTC might increase BTC liquidity on Solana, benefiting multiple DeFi protocols if it gains traction.
BREAKING: @coinbase LAUNCHES $CBBTC, SPL TOKEN BACKED 1:1 BY $BTC, ON SOLANA pic.twitter.com/QoMuFW6fCP
— DEGEN NEWS (@DegenerateNews) November 7, 2024
Coinbase Expands Bitcoin DeFi Access
The cbBTC rollout includes $10 million in tokens ready for Solana DeFi, with approximately $500,000 already circulating in trading pools on platforms like Meteora, Orca, and Kamino. Marius Ciubotariu, co-founder of Kamino, expressed optimism, suggesting that Solana could emerge as an alternative to Ethereum for bitcoin-backed DeFi activities.
Coinbase’s strategy aligns with a broader plan to offer cross-chain options for bitcoin-backed DeFi, enhancing access across various networks.
This article was written by Tareq Sikder at www.financemagnates.com.
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