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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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