Coinbase launches cbETH wrapped ETH staking token ahead of the Merge that is expected to happen next month.
Customers who stake ETH on the cryptocurrency exchange can obtain a liquid representation of their staked-ETH in the form of Coinbase Wrapped Staked ETH.
cbETH is an ERC20 utility token that will be issued in September, just before the Ethereum blockchain’s Merge. The coins are planned to be accessible for trade on August 25 if the liquidity criteria are satisfied. ently became the focus of a class-action lawsuit, which has the potential to alter how the US Securities and Exchange Commission views crypto assets as securities.
cbETH in DeFi
The whitepaper states that cbETH can be created or destroyed using a fluctuating conversion rate. Contracts will be open source, and audits will be publicly available. This is anticipated to allow other organizations, especially DeFi protocols, to make educated judgments about adding token support.
Coinbase’s current endeavor aims to promote widespread acceptance of the token and anticipates many use cases for trading, transferring, and using in DeFi apps following the Merge. According to the whitepaper, investors can use cbETH to cash out their staked ETH, move their staked ETH to another non-custodial wallet, and deposit cbETH into a protocol as collateral.
cbETH is intended to serve as a cToken or compound token, making it interoperable with existing DeFi-related decentralized apps. It is also worth noting that ETH and cbETH are not pegged and so cannot be interchanged 1:1. In reality, it reflects staked ETH as well as all collected staking interest from June 16 of this year, when Coinbase launched cbETH’s conversion rate and balance.
“Over time, the price of cbETH will likely deviate from ETH because cbETH represents 1 staked ETH plus all of its accrued staking interest starting from when cbETH’s conversion rate and balance were initialized. cbETH is minted exclusively by Coinbase. cbETH can be sold or sent off-platform, while ETH2 will remain locked up until a future protocol upgrade.”
Coinbase stated that once a significant amount of cbETH is produced, trading for the cbETH-USD pair would begin in stages. However, in some countries, support for the asset may be restricted.
Coinbase launches cbETH wrapped ETH staking token in hopes of getting greater gains in the industry.
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Coinbase VS SEC
The newest event comes after the US Securities and Exchange Commission (SEC) opened a new investigation against Coinbase.
The exchange was subpoenaed by the watchdog, who wanted to know how it defines and lists digital assets, as well as its staking programs, stablecoins, and yield-generating products. The commission had already launched legal action against Coinbase, accusing it of misrepresenting nine securities as cryptocurrency.
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