As a seasoned analyst with years of experience in the crypto sphere, I find Coinbase’s move to deploy cbBTC on Solana not only strategic but also timely. The expansion into Solana’s DeFi ecosystem is a smart play, given the impressive growth Solana DeFi has seen this year. However, it’s essential to remember that while cbBTC competes with established players like Wrapped Bitcoin (WBTC), it fills a gap left by soBTC’s collapse during the FTX debacle.
In simpler terms, Coinbase – the leading U.S. cryptocurrency platform – has introduced a wrapped form of Bitcoin on the main blockchain network, Solana. This move aims to widen the use of this digital asset within the field of Decentralized Finance (DeFi).
In a recent announcement posted on X on November 7th, the company expressed their excitement as they introduced the first Coinbase token issued on Solana, paving the way for straightforward entry into Bitcoin (BTC) usage.
Coinbase revealed that cbBTC will be structured as a Solana Program Library (SPL) token, which is a type of token built on the Solana platform that can represent both interchangeable (fungible) and unique (non-fungible) assets.
Each token corresponds directly to a Bitcoin, enabling users to leverage Bitcoin within the Decentralized Finance (DeFi) environment of the Solana network,” it noted.
Here are some Solana-based decentralized exchanges and DeFi platforms where cbBTC can be found: Jupiter, Meteora, Kamino Finance, Raydium, Phoenix, Jito, and Drift.
The team leading the Solana-based Bitcoin lending, liquidity, and leverage platform expressed that their goal is for Kamino to become one of the biggest decentralized finance (DeFi) venues specializing in cbBTC, with Bitcoin being at the top.
Initially, Hassan Ahmed, Country Director at Coinbase in Singapore, unveiled intentions to debut cbBTC on the Solana platform during the Breakpoint event held in September.
The firm has already deployed around 135 cbBTC worth roughly $10 million to Solana, according to the Solana blockchain explorer Solscan.
Furthermore, cbBTC serves as a replacement for soBTC, a former Bitcoin asset on the Solana network that decoupled and faltered during the downfall of the FTX trading platform.
On November 7th, the Solana team announced that Coinbase’s wrapped BTC asset is not the sole representation of Bitcoin on their network. Instead, it joins an expanding collection of programmable Bitcoin alternatives, which include Threshold’s tBTC, Zeus Network’s zBTC, and WBTC through Wormhole, within the Solana ecosystem.
Since its debut in mid-September, the value of Coinbase’s wrapped Bitcoin product has significantly increased, exceeding a market capitalization of over $1 billion.
Competing against industry-standard Wrapped Bitcoin (WBTC), a major contender to BitGo, it boasts a market capitalization of approximately $11 billion and is accessible across numerous layer-1 and layer-2 network platforms.
2024 has witnessed an impressive rebound for Solana’s DeFi sector, as the amount locked in DeFi platforms surged by 250% from the start of the year, culminating in a staggering $8.25 billion, as reported by DefiLlama.
As a researcher delving into Decentralized Finance (DeFi) on the Ethereum blockchain, I’ve observed a somewhat sluggish recovery compared to initial expectations. However, it’s crucial to note that the Total Value Locked (TVL) within this ecosystem currently stands at around $60 billion – a significant figure that has seen an impressive 72% growth this year alone.
The price of SOL increased by 3.4% following the announcement, reaching $200 in early trading on November 8th, as reported by CoinGecko.
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2024-11-08 06:36