Today, the American crypto exchange Coinbase announced that it has deployed its Wrapped BTC (cbBTC) on the Solana blockchain. The token, which marks the exchange’s first innovation in Solana, is currently available on three networks, including Base and Ethereum.
Coinbase Launches cbBTC on Solana
A wrapped token is a crypto that represents another asset, typically from a different blockchain, encased in a new token. These types of tokens enable cross-chain interactions and increase liquidity by allowing the original assets to be traded on other networks.
According to Coinbase, cbBTC allows seamless transactions between Bitcoin and Solana, with automatic conversions at a 1:1 ratio. When users send Bitcoin from Coinbase to Solana, it is exchanged for cbBTC, and when receiving cbBTC, it’s converted back to Bitcoin. Coinbase believes this latest move will foster more excellent crypto ecosystem connectivity and DeFi adoption.
To alert the crypto community to the possibilities of the wrapped SPL token, Coinbase tweeted about some big players in the Solana ecosystem. These protocols, including Jupiter, Meteora, Kamino, Jito, Drift, Raydium, and Orca, may add cbBTC to their offerings soon. Users hope to start lending, borrowing, trading, and facilitating liquidity for the new token as offered by the DApps.
Not the First on Solana
Solana’s Bitcoin ecosystem is expanding with the addition of cbBTC, joining other existing tokens such as tBTC and WBTC. These tokens also offer tokenized Bitcoin solutions but differ in security and design. WBTC holds Bitcoin with a single custodian, whereas tBTC uses a decentralized, validator-controlled wallet.
WBTC, the first and largest wrapped bitcoin by Marketcap, and tBTC are also available across other blockchains, including Ethereum, Arbitrum, Optimism, and Polygon. Currently, WBTC’s circulating supply is $147,007. Its $11.24 billion market share is significantly higher than cbBTC’s $1.03 billion.
Notably, the presence of other wrapped Bitcoin tokens will enhance Solana’s ecosystem, providing users with more choices and flexibility. Meanwhile, its native token, SOL, has been growing in value. It recently flipped the Binance-affiliated token BNB, coming in fourth place in market capitalization, while analysts predict it will outperform Ether and BTC.
Other Wrapped token creators like Kraken may deploy their kBTC to Solana soon.
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