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Coinbase has launched a Bitcoin-backed token on the Solana blockchain in the form of "cbBTC."
Prior to FTX's collapse, the exchange issued "soBTC," a bitcoin-pegged token widely used on Solana. When FTX collapsed, soBTC became unusable and Solana's DeFi system no longer had a reliable, liquid Bitcoin standard.
This hindered Solana-based DeFi protocols and put them at a disadvantage compared to protocols on Ethereum, which offered Bitcoin-backed tokens.
Coinbase is thereby introducing cbBTC to Solana, which allows users to send Bitcoin to Coinbase, receive cbBTC in their Solana wallet, and trade it in Solana's DeFi protocols.
cbBTC is positioned to be Solana's standard for Bitcoin-based DeFi with Coinbase entering the scene with $10 million worth of cbBTC available to Solana protocols and an additional $500,000 circulating in trading pools and reserves. This is hoped to boost liquidity and attract stronger adoption.
Trading platforms such as Raydium and Kamino will benefit from the enhanced Bitcoin liquidity, which should attract more users to trade, lend, and borrow Bitcoin-backed assets on Solana.
The move is also a first for Coinbase, as its first native token issuance on Solana; the exchange previously had a stronger focus on Ethereum with its layer-2 network, Base. cbBTC was first launched on Ethereum and Base back in September.
Coinbase-to-Base transfers are free but Coinbase-to-Solana transfers incur a small fee, highlighting a slight cost disparity in moving bitcoin across these ecosystems.
Earlier this week, Coinbase announced the launch of its new Engineering Hub in Singapore to bolster the local developer ecosystem.
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Supported by the Singapore Economic Development Board (EDB), the initiative offers resources and training to local developers with the aim to attract and develop blockchain talent in the APAC region.
