Coinbase Introduces First Native Token on Solana with cbBTC Releas
by Oliver Dale · BlockonomiTLDR
- Coinbase launches cbBTC on Solana, marking its first native token on the blockchain
- Current cbBTC deployment has $10M ready for Solana DeFi, with $500K already in trading pools
- Launch fills gap left by FTX’s soBTC collapse in November 2022
- Bitcoin hit new record high of $76K amid Trump’s election victory
- cbBTC has reached $1B in total value on Ethereum within nine weeks of launch
Coinbase has introduced its bitcoin-backed token, cbBTC, to the Solana blockchain, marking the exchange’s first native token issuance on the platform.
The launch, announced on November 7, 2024, comes with an initial deployment of $10 million ready for integration into Solana’s decentralized finance (DeFi) ecosystem.
The move addresses a notable gap in Solana’s DeFi landscape that emerged after the collapse of FTX in November 2022.
The previous standard-bearer for bitcoin representation on Solana, soBTC, became inactive following FTX’s downfall, leaving the ecosystem without a widely recognized bitcoin standard for nearly two years.
Coinbase’s cbBTC token operates as an SPL token on Solana, enabling users to swap between the exchange and their Solana wallets.
The system maintains a 1:1 backing with bitcoin, allowing traders to use their bitcoin holdings within Solana’s DeFi protocols for trading, lending, and borrowing activities.
Early adoption indicators show promise, with $500,000 of cbBTC already active in trading pools on platforms like Meteora and Orca, as well as in a reserve on the Kamino trading protocol. This initial traction suggests potential for broader adoption across Solana’s DeFi ecosystem.
The launch timing coincides with bitcoin reaching a new all-time high of $76,000, adding extra attention to the initiative.
The cryptocurrency market has shown increased activity following recent political developments, including Donald Trump’s election victory.
Coinbase’s implementation includes a fee structure for transfers, with users paying 40 cents for moving bitcoin between Coinbase and Solana.
This differs from the fee-free transfers available on Coinbase’s Base network, though the difference hasn’t deterred early adopters.
Several prominent Solana-based decentralized exchanges have welcomed the addition. Drift protocol announced plans to accept cbBTC as collateral for trading, while other platforms have expressed optimism about the token’s potential impact on their operations.
The token’s introduction follows its successful launch on Ethereum and Base in September 2024. On these platforms, cbBTC has accumulated over $1 billion in total value within nine weeks, challenging established wrapped bitcoin products like BitGo’s WBTC.
Coinbase’s expansion to Solana was first revealed at the Solana Breakpoint conference in Singapore. Hassan Ahmed, Coinbase’s Country Director of Singapore, cited user demand as a key factor in the decision to bring cbBTC to the Solana ecosystem.
Previous attempts to establish bitcoin-backed tokens on Solana have seen limited success. Competitors like 21.co’s 21BTC and Threshold’s tBTC have achieved relatively modest circulation, with 21BTC holding less than $1.5 million in Solana DeFi.
InfraRay, a contributor to the Solana-based exchange Raydium, noted that Coinbase’s native issuance of cbBTC “reduces the risk surface by half” compared to previous solutions that required bridging from other networks.
Marius Ciubotariu, Kamino’s co-founder, expressed optimism about cbBTC’s potential impact, suggesting that bitcoin-related DeFi activity could shift away from Ethereum to Solana’s platform.
A Coinbase spokesperson emphasized that the launch aligns with their strategy to expand bitcoin’s utility across various blockchain networks, aiming to attract more users to on-chain activities.
The implementation includes integration with multiple Solana DeFi protocols, allowing users to engage in trading, lending, and borrowing activities using their bitcoin holdings through the cbBTC token.
Despite Coinbase’s stronger presence in the Ethereum ecosystem, particularly through its Base network, the company views the Solana expansion as an important step in providing users with more options for utilizing their bitcoin holdings across different blockchain platforms.