What happened
Shares of Coinbase Global ( COIN 4.92% ) jumped as much as 5.3% in trading on Friday after the company announced Coinbase Wallet support for Solana ( SOL -0.01% ). At 3:10 p.m. ET Coinbase was still up 3.7% for the day and Solana has gained 1.7%, although it’s up nearly 10% from lows hit early Friday morning.
So what
Coinbase announced that its wallet, which is a separate app or extension in a browser from the Coinbase app, will support Solana. There’s currently no support to connect to decentralized applications or for non-fungible tokens (NFTs) at this point, but this is a small step toward accessing the Solana ecosystem.
Image source: Getty Images.
Wallets are the user’s way to access both cryptocurrencies and NFTs, so they’re a critical part of the user experience in what’s known as Web3. Thus far, Coinbase Wallet has stuck to the Ethereum blockchain, but it’s now branching out to Solana. This is likely because Solana has exploded its user base and number of developers over the last six months, which could potentially threaten Ethereum’s current dominance in decentralized apps and NFTs.
Now what
Coinbase is clearly expanding its reach across cryptocurrencies and given Solana’s growth it’s not surprising this is the next step. While the Coinbase Wallet is sort of separate from Coinbase’s core business, it does seem like the ties between them are growing. In time, this could help Coinbase build a Web3 identity and digital asset base for users, which would make the business extremely profitable as this ecosystem grows. Strategically, this is another great move for Coinbase long-term.
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