Coinbase has announced cbETH, a liquid, wrapped token that will represent the ETH staked on its platform. Coinbase aims to get users to circulate cbETH as staked Ethereum may remain locked until 2023. The company says it will likely compete with another major liquid staking platform like Lido. Here are the details…
Coinbase made a new announcement for Ethereum
Coinbase announced on Wednesday that it will introduce a token called Coinbase Wrapped Stake ETH (cbETH). The cbETH token stands for ETH2. This represents the ETH staked with the exchange. ETH2 will remain locked until a future Ethereum upgrade expected in 2023. In turn, cbETH will be liquid and users will be able to exchange cBETH or send the asset elsewhere.
Coinbase states that this will help users exit staked ETH, use the token as collateral in DeFi, and transfer or “gift” staked ETH. Coinbase warns that cbETH transfer will only be possible on the Ethereum network. “Do not send this asset over other networks or your money will be lost,” he advises.
The company defines cbETH as a term often used to distinguish cryptocurrencies from payment tokens and other assets that may fall under securities regulations. It adds that while staking fees apply, there are “no fees associated with ‘wrapped’ and unlocking cbETH.”
Coinbase will stabilize 1:1 with ETH
Coinbase says that cbETH is not intended to provide a 1:1 price fix with ETH. Instead, it represents the ETH staked and the accrued interest from the moment the company launched the conversion rate and balance of cbETH on June 16. In the whitepaper, Coinbase acknowledges that it plans to compete with another product that is “on the verge of breaking the network record.” This competitor product is likely Lido and its liquid staked ETH (stETH) token. Coinbase believes it can diversify the staking market based on its successful participation in the USDC stablecoin.
The announcement came weeks before Ethereum’s Merge, which was scheduled to launch on September 6. The event will see Ethereum replace its Proof-of-Work mechanism with Proof-of-Stake network validation. cryptocoin.com As we have also announced, Merge will take place on September 15th. Merge has been studied for years. Merge’s final rehearsal, the merge on the Goerli testnet, was successful earlier this month. The cryptocurrency community has also seen the upgrade imminent. sent a signal that the legendary upgrade is imminent. In fact, this situation caused an increase in the price of ETH, the second largest cryptocurrency by market capitalization. While ETH has been bullish throughout the month of August, it has recently lost value due to the overall cryptocurrency market.
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