Coinbase’s cbBTC Debut on Solana Aims to Revitalize Post-FTX DeFi Landscape

Coinbase has launched its wrapped Bitcoin token (cbBTC) on the Solana blockchain, marking a significant move to fill the void left by FTX’s collapse in late 2022. As the first token issued by the U.S.-based exchange on Solana, cbBTC arrives at a time when Bitcoin is reaching unprecedented heights following recent political developments.

The token, which maintains a 1:1 backing with Bitcoin, has already seen Coinbase deploy approximately $10 million worth of cbBTC to jumpstart liquidity on Solana. Several major decentralized exchanges and protocols, including Jupiter, Meteora, and Kamino Finance, have integrated the token into their platforms.

This development is particularly noteworthy as it addresses a critical gap in Solana’s DeFi ecosystem that emerged after the demise of soBTC, a wrapped Bitcoin token widely believed to have been controlled by FTX. The collapse of soBTC left Solana’s DeFi landscape without a trusted Bitcoin-based trading asset, putting it at a disadvantage compared to Ethereum’s more established DeFi sector.

“There’s much higher hopes” for cbBTC’s success, according to a senior figure in the Solana ecosystem, particularly given Bitcoin’s recent surge to new all-time highs. The token’s launch coincides with a remarkable recovery in Solana’s DeFi sector, which has seen its total value locked increase by 250% since the start of 2024, reaching $8.25 billion.

Coinbase’s wrapped Bitcoin product has already demonstrated its potential, accumulating over $1 billion in market capitalization since its initial launch on Ethereum and Base in September. While this figure is impressive, it still trails behind the industry-standard BitGo’s Wrapped Bitcoin (WBTC), which maintains an $11 billion market cap across various networks.

The expansion to Solana represents Coinbase’s strategic push to enhance Bitcoin’s utility in decentralized finance. While transfers from Coinbase to Solana incur a 40-cent fee, compared to free transfers on Base, the move signals the exchange’s commitment to broadening its presence across multiple blockchain ecosystems.

As the crypto market continues to evolve, cbBTC’s success on Solana could play a crucial role in strengthening the platform’s position as a major DeFi hub, potentially catalyzing increased trading activity and liquidity in the ecosystem.