Coinbase is the second most used exchange in the world. It is also the main platform used in the United States for the exchange of cryptos. With the approach of the Merger which designates the transition of Ethereum (ETH) from Proof-of-Work to Proof-of-Stake, the exchange is launching a remarkable project.
Discover the Coinbase Wrapped Staked Ethereum (cbETH)
During the merger, ETH2 will remain locked to the Ethereum network, until the update is complete. Users will therefore normally not have access to the new version of the ETH token throughout the transition. But, the American exchange has found a way to allow its users to use their ETH2 despite the Merger.
Indeed, Coinbase has decided to launch a custom digital asset called Wrapped Staked Ethereum (cbETH). Regarding this, the cryptocurrency exchange said: “Coinbase allows customers who stake ETH to receive an ERC20 utility token called Coinbase Wrapped Staked ETH (cbETH) which is a liquid representation of their staked ETH.“.
“All staked ETH is locked until a future Ethereum protocol upgrade is completed. In the meantime, Coinbase created cbETH to give customers the ability to sell, transfer, spend, or otherwise use their staked ETH while it remains locked.“, he added.
The new ether (ETH) based token from Coinbase is a liquid and tradable asset. Only investors who have staked their Ethereum on the platform can get it. It is possible to move it off of Coinbase, but not on other blockchains. The exchange warns users: “Do not send this asset to other networks or your funds will be lost.“.
In announcing the launch of the cbETH utility token, Coinbase stated that its price is not intended to be that of ETH 1:1. The exchange clarified, “cbETH represents staked ETH plus all of its accrued staking interest, from the time the cbETH conversion rate and balance was initialized (June 16, 2022). “.
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