Coinbase Launches Custom Crypto Asset As Ethereum Merger Approaches
Top US-based crypto exchange platform Coinbase is launching a custom crypto asset ahead of Ethereum’s (ETH) upcoming merger into a proof-of-stake mechanism consensus.
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 Merge will lock all ETH2 in place until the update is complete.
“Coinbase allows customers who stake ETH to receive an ERC20 utility token called Coinbase Wrapped Staked ETH (cbETH), which is a floating representation of their staked ETH.
All staked ETH is locked 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.”
The ETH-based altcoin, which is a liquid, tradable asset given to investors who staked Ethereum on Coinbase, can be sold or sent off-platform but cannot be used on other blockchain networks, warns the crypto exchange.
“Do not send this asset over other networks or your money will be lost.
Coinbase Wrapped Staked ETH (cbETH) is a utility token that represents ETH2, which is ETH staked through Coinbase. cbETH can be sold or sent off-platform, while ETH2 will remain locked until a future protocol upgrade.”
Coinbase says the ability to wrap ETH2 will be gradually rolled out to eligible users throughout the day. The crypto exchange also notes that cbETH is not intended to track Ethereum’s price 1:1.
“The price of cbETH is NOT intended to track the price of ETH 1:1. cbETH represents staked ETH plus all of its accrued stake interest, as of when cbETH’s conversion rate and balance were initialized (June 16, 2022).
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