Nearly two years after FTX’s collapse left a significant void in Solana-based decentralized finance (DeFi), Coinbase has launched a new bitcoin-backed token, cbBTC, on the blockchain, potentially filling that gap. Launched on Thursday, cbBTC enables users to swap in and out of the token, seamlessly transferring it between the exchange and their Solana wallets. This functionality has many Solana-based protocols hopeful that cbBTC could become a gold standard, driving liquidity and adoption across the ecosystem.
One Solana official expressed “much higher hopes” for cbBTC’s success, particularly as Bitcoin (BTC) has recently surged to new all-time highs following the election of Donald Trump. The new token is seen as a potential game-changer for Solana’s DeFi, especially after the failure of soBTC, the previous bitcoin-pegged token believed to have been controlled by FTX. The collapse of soBTC left Solana’s DeFi ecosystem without an efficient means of trading bitcoin, putting it at a disadvantage compared to Ethereum DeFi, which has had established solutions for years.
Coinbase’s native issuance of cbBTC on Solana is expected to reduce risks, according to InfraRay, a contributor to the popular Solana-based exchange Raydium. “We could see a surge of BTC liquidity on-chain, which could increase usage in many different DeFi protocols,” said InfraRay, adding that the hope is for cbBTC to drive liquidity and trigger positive growth cycles within Solana’s ecosystem.
With nearly $10 million worth of cbBTC already deployed in Solana DeFi, Coinbase’s token is off to a strong start. In contrast, previous efforts by companies like 21.co and Threshold, which issued 21BTC and tBTC, respectively, have seen much lower adoption, with 21BTC circulating only around $1.5 million in Solana DeFi.
While cbBTC is still in its early stages, liquidity is already flowing into trading pools on platforms like Meteora, Orca, and Kamino. Marius Ciubotariu, co-founder of Kamino, expressed optimism: “I think and hope it’s gonna be big,” he said, noting that most BTC DeFi activity has traditionally occurred on Ethereum, but there is no reason for that to be the case going forward.
Coinbase’s decision to issue cbBTC on Solana marks its first involvement with Solana DeFi, as the exchange has traditionally been more engaged with the Ethereum ecosystem, particularly through its own layer-2 network, Base. A Coinbase spokesperson emphasized that expanding support to Solana aligns with the company’s broader goal of bringing “billions of users on-chain.”
Although Coinbase first launched cbBTC on Base and Ethereum in September, Solana users face a small fee—40 cents—when transferring bitcoin to Solana, while transfers to Base are free. Despite this, Coinbase’s move to Solana could still significantly impact the blockchain’s DeFi landscape, potentially driving more BTC liquidity into the ecosystem and offering new opportunities for traders and protocols alike.
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