- Coinbase clarified that cbETH’s pricing is not intended to mirror Ethereum’s.
- Trading of the cbETH-USD pair will start in stages as per the exchange.
Coinbase, a renowned cryptocurrency exchange, announced on Wednesday the debut of cbETH, its new wrapped and staked Ethereum ERC-20 token, just in time for the Ethereum merge next month.
The exchange’s thread stated:
“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-up until a future protocol upgrade.”
In exchange for monetary incentives or benefits, staking is the process of dedicating an asset to a network to aid in the validation of transactions.
Not Intended to Mirror Ethereum
One way to transfer the value of an item from one blockchain to another is through a wrapped token. Wrapped Bitcoin (WBTC) is one solution that makes it possible to utilize Bitcoin on the Ethereum network. The value of Wrapped Bitcoin should track the value of Bitcoin, as is customary for wrapped tokens that are backed by the asset they represent.
Coinbase will add support for Coinbase Wrapped Staked ETH (cbETH) on the Ethereum network (ERC-20 token). Do not send this asset over other networks or your funds will be lost.
— Coinbase Assets (@CoinbaseAssets) August 24, 2022
What is cbETH? Let’s dive in 🧵👇 pic.twitter.com/n3Dp4OA6HO
In a Twitter thread, Coinbase clarified that cbETH’s pricing is not intended to mirror Ethereum’s and instead reflects staked ETH plus all of its earned staking interest started on June 16, 2022, the day cbETH’s conversion rate and balance were first set.
Coinbase states in its help center that users that stake ETH on the exchange will be rewarded with the cbETH ERC20 utility token. Coinbase claims that the new cryptocurrency is a freely transferable counterpart of staked ETH. Trading of the cbETH-USD pair will start in stages, with support for cbETH restricted in certain locations, the business said in a Twitter thread.
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