Coinbase Announces Staking Token for Ether Wrapped Ahead of Ethereum Merger

Cryptocurrency exchange Coinbase has announced the introduction of a new liquid staking token called Coinbase Wrapped Staking Ether or “cbETH”. cbETH is an ERC-20 utility token and will be available to customers who share Ether on Coinbase. Other users can withdraw their Ether from Coinbase, stake them, and then roll the ETH2 into cbETH. Coinbase stated that all stacked ETH has been locked until a future upgrade to the Ethereum protocol. The announcement comes just three weeks before a planned merge upgrade to the Ethereum mainnet.

The cbETH token will “give customers the option to sell, transfer, spend, or otherwise use their stacked-ETH while it’s locked.” in Blog postCoinbase further explained, “Our hope is that cbETH will gain strong adoption for use in trading, transfers and DeFi applications. With cbETH, Coinbase aims to contribute to the broader crypto ecosystem by creating high-utility wrapped tokens and open sourcing smart contracts.”

As a matter of caution, the exchange explained, “Coinbase will add support for Wrapped Staked ETH (cbETH) on the Ethereum network (ERC-20 token). Do not send this asset to other networks or you will lose your funds.”

Coinbase also noted that cbETH does not track the price of ETH 1:1. This represents only the staked ETH in addition to all accumulated stake interest. As each cbETH token represents more stacked ETH, this could result in “differences in the prices of these assets over time.”

The exchange started offering Ether staking to retail players last year. Earlier this month, they started offering ETH stakes to institutional players.

Meanwhile, the Ethereum Merge Upgrade is getting closer to the final date. The Ethereum Merge Event will take place in two separate events. The Bellatrix upgrade will take place on the Beacon Chain on September 6th. Similarly, the Paris upgrade will take place on the execution layer on September 15.