Recently, Coinbase unveiled its introduction of Coinbase Wrapped BTC [cbBTC] on the Solana [SOL] blockchain. This unique SPL token is backed by Bitcoin [BTC] at a 1:1 ratio and securely held in Coinbase’s custody.
In a statement shared on X (formerly Twitter), Coinbase emphasized the importance of this development, stating:
“This marks Coinbase’s inaugural token issuance on Solana, aiming to provide convenient access to BTC.”
cbBTC’s Establishment on Solana
Following its announcement at the Solana Breakpoint event in Singapore during late September, Coinbase’s unveiling of cbBTC on the Solana blockchain has garnered significant attention. Notably, cbBTC joins a growing list of wrapped Bitcoin tokens on Solana, including tBTC and WBTC (via Wormhole), as well as forthcoming assets like zBTC from Zeus Network and sBTC from Stacks.
This Bitcoin-backed token is anticipated to play a crucial role in Solana’s decentralized finance (DeFi) ecosystem by expanding liquidity and collateral opportunities within lending protocols.
Upon its debut, cbBTC will receive backing from several reputable Solana-based DeFi platforms, such as Jupiter Exchange, Meteora AG, Kamino Finance, Jito Labs, Phoenix, Drift Protocol, Raydium, Orca, Save Finance, Manifest, and Loopscale Labs.
Interestingly, 2024 has proven to be a prosperous year for Solana in the DeFi realm, with the Total Value Locked (TVL) surging by 385% Year-to-Date according to the latest data from Artemis, reaching $6.8 billion at the time of reporting.
cbBTC’s $1 Billion Achievement
While cbBTC’s integration into Solana marks a significant milestone, it is essential to note that the token had previously been launched on Ethereum [ETH] and Coinbase’s Layer 2 network, Base.
Moreover, within a mere nine weeks, cbBTC had already achieved a $1 billion market cap, a feat attained prior to its Solana introduction. Despite its relatively recent emergence in the market, cbBTC has successfully positioned itself as the sixth-largest wrapped asset, as per CoinMarketCap, trailing only behind Wrapped Bitcoin [WBTC].
Performance of SOL
Meanwhile, SOL has experienced a notable uptrend over the past week, primarily influenced by BTC’s bullish trajectory. At present, SOL is valued at $198, standing approximately 23% below its all-time high (ATH).
According to CoinMarketCap, SOL observed a daily increase of 5.04% and a substantial 18.55% surge over the last week. The coin’s market cap climbed to $93.53 billion at the time of crafting this article.
Although the 24-hour trading volume demonstrated a 35% decrease, the enduring value of SOL and its recent price surge exemplify its sustained momentum.
The ongoing integration of assets like cbBTC underscores Solana’s strengthening presence within the cryptocurrency market.