Coinbase is the second most used exchange in the world. It is also the main platform used in the United States for crypto exchange.
Wrapped Staked Ethereum (cbETH) will enable customers to use their Staked Ethereum (ETH2) on coinbase
As the Merge approaches, which designates Ethereum (ETH)’s transition from Proof-of-Work to Proof-of-Stake, the platform is launching a custom crypto asset as Ethereum (ETH).
Coinbase says it is launching Wrapped Staked Ethereum (cbETH) so customers can have the option to use their Staked Ethereum (ETH2) on the platform, as the merger will lock all ETH2s in place until the upgrade is complete.
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.
During the merge, ETH2 will remain locked on the Ethereum network, until the end of the upgrade. 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.
All staked ETH are blocked until a future Ethereum protocol upgrade is completed. In the meantime, Coinbase has created cbETH to give customers the ability to sell, transfer, spend or otherwise use their staked ETH while it remains locked, he added.
Coinbase’s new ether-based token (ETH) is a liquid, tradable asset. Only investors who have staked their Ethereum on the platform can get it. It is possible to move it out 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 said it is not intended to be priced like ETH 1:1. The exchange said, “cbETH represents the staked ETH plus all of its accumulated staking interest, as of the time the cbETH conversion rate and balance were initialized (June 16, 2022).”