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Crypto exchange Coinbase said Thursday its wrapped Bitcoin product, cbBTC, has launched on Solana following its debut in September as it seeks to broaden its use outside the Ethereum ecosystem.
Representing the first token issued by the San Francisco-based exchange on Solana, Coinbase said that cbBTC will take the form of a so-called SPL token. According to Solana documentation, SPL tokens can be used to represent both fungible and non-fungible assets.
Whether it’s traded on a decentralized exchange or used as collateral in a lending protocol, Coinbase’s cbBTC is expected to be used in decentralized finance (DeFi). Backed 1:1 with Bitcoin, the token effectively allows crypto users to tap Bitcoin on other networks.
As Solana’s DeFI ecosystem competes for crypto users, Coinbase’s product is cementing the presence of one of the industry’s most popular exchanges on the Ethereum competitor. Given the product’s swift rise on Ethereum and Coinbase’s layer-2 scaling solution, Base, the wrapped product could find similar success as a means of using Bitcoin on Solana.
Since it was introduced earlier this year, cbBTC has challenged Bitcoin-based incumbents, such as the BitGo-launched WBTC. Even though WBTC has gained $11 billion market capitalization since 2019, the total value of cbBTC has crossed $1 billion over the course of nine weeks.
The move to Solana was welcomed by several decentralized exchanges operating on Solana, a speedy layer-1 network that has rivaled Ethereum in terms of DeFi activity this year. Among the eager projects were Orca and Drift, which issued celebratory statements on Twitter (aka X).
“Drift welcomes Coinbase wrapped Bitcoin on Solana,” Drift said, adding that users will be able to “start using Coinbase’s cbBTC as collateral to trade on Drift.”
Coinbase’s push into the wrapped Bitcoin space has coincided with some controversy surrounding BitGo’s product. After BitGo unveiled a tie-up with the Hong Kong-based BiT Global in August to diversify its custody operations, the firm’s connection to Justin Sun raised eyebrows as the Tron co-founder has meanwhile scrutinized Coinbase’s product.
Not long ago, soBTC was a popular form of wrapped Bitcoin on Solana. Believed to be issued by the collapsed crypto exchange FTX or its sister firm Alameda Research, the token depegged alongside the collapse of former FTX CEO Sam Bankman-Fried’s empire in November 2022.
Coinbase initially said that its Bitcoin-based product was coming to Solana in late September, announcing the move at Solana Breakpoint in Singapore. At the annual Solana conference, Coinbase Country Director of Singapore Hassan Ahmed described the move as a no-brainer.
"We recently launched cbBTC on Base, but our users love Solana, and so do we,” he said. “So we are very excited to announce that we will be bringing native cbBTC to Solana as well."
Edited by Sebastian Sinclair