Bitcoin-wrapped token cbBTC project to integrate with Solana, Coinbase: Users are loving Solana

On September 21, Hassan Ahmed, the General Manager of Coinbase in Singapore, announced at the Solana Breakpoint 2024 conference that they plan to introduce their own wrapped token for Bitcoin, cbBTC, onto the Solana blockchain.

WBTC has been the dominant player in wrapped Bitcoin tokens, but it has faced a boycott since BitGo, the creator, was taken over by the founder of TRON, Sun Yuchen. As a result, many new competitors have emerged to compete for its position, with cbBTC being one of the most popular.

Sun Yuchen's takeover of WBTC raises concerns! BitGo and BiT Global reach a new partnership, MakerDAO launches risk control proposal.

Project to Introduce cbBTC to Solana

Coinbase announced on Twitter in August 2024 that it would launch a new wrapped token called cbBTC. On September 12, it was officially released on Ethereum and the Base chain, with plans to apply cbBTC to more chains in the future.

Ahmed stated that despite the recent launch of cbBTC on the Base chain, user data research revealed a preference for Solana, which coincided with Coinbase's liking for Solana as well. Therefore, cbBTC will also be released on Solana. When asked for more details such as release dates, Ahmed mentioned that they are working hard and will announce the news upon launch, asking for patience.

What is Wrapped Bitcoin (WBTC)?

Wrapped Bitcoin, often referred to as WBTC, is a tokenized version of Bitcoin (BTC) that exists on other blockchains such as Ethereum or Binance Smart Chain. The concept of wrapping Bitcoin is to enable its value to be utilized on these other platforms that often have smart contract functionality not supported by the Bitcoin network.

Here's how it works:

1. Tokenization: Bitcoin is "wrapped" by locking a specific amount of BTC in a smart contract or with trusted custodians to mint an equivalent amount of WBTC on the target blockchain, such as Ethereum.

2. 1:1 Pegging: WBTC tokens maintain a 1:1 ratio with Bitcoin, where each WBTC represents a locked Bitcoin.

3. Use Cases: Through WBTC, users can participate in decentralized finance (DeFi) applications on Ethereum or other blockchains, such as lending, trading, etc., without needing to sell their Bitcoin. This bridges the gap between the value of Bitcoin and the smart contract capabilities of blockchain platforms.

4. Redemption: Users can redeem Bitcoin at any time through a reverse process by burning WBTC to unlock the corresponding BTC.

In public blockchains with smart contracts such as Ethereum, BSC, etc., ecosystem participants anticipate that over half of Bitcoin's market value can be transferred to their chains for more value applications.