Coinbase launches a new token called Wrapped Ethereum Staking or cbETH
The token comes with a diverse set of use cases in the broader liquid staking ecosystem
Coinbase has unveiled its own liquid staking token dubbed cbETH ahead of the highly anticipated Ethereum merge.
Coinbase Launches Its Own Liquidity Staking Token
According to Coinbase, the token has been launched to tend to a variety of use cases including being used as collateral in several DeFi projects alongside facilitating the selling and transfer of staked ETH.
Per the official whitepaper, Coinbase is extending support to liquid staking for its ETH stakers by introducing cbETH also known as Coinbase Wrapped Staked ETH, where the staked asset is ETH and the issuer will be Coinbase.
“We hope that both will achieve robust adoption for trade, transfer, and use in DeFi applications. With cbETH Coinbase aims to contribute to the broader crypto ecosystem through creating high utility wrapped tokens and open source smart contracts. ” as stated in the Coinbase whitepaper
In general crypto terminology, wrapped tokens refer to a type of digital asset that permits the value of an asset to move from one blockchain to another. Wrapped tokens are a way to use crypto assets on different blockchains, other than the blockchain that they were built upon. Wrapped tokens are often backed by their underlying assets and follow the original price of the assets that they are backed with.
Liquid staking is dubbed a unique alternative that permits users to stake their ETH. Per Coinmarketcap, the process allows users to stake their ETH without the requirement of transactions being enabled. This is done through the issuance of tokenized versions of the staked funds which help a user to conduct transfers and trade their funds.
Coinbase cbETH is built on similar grounds to facilitate cross transfers which can later be unwrapped to claim the asset rewards. Holders of the ETH2 will be able to avail cbETH through the exchange itself. However, the “unwrapping” is yet to be rolled out and will be available sometime in near future.
Coinbase further added that once the supply of cbETH is sufficiently added, the exchange will then introduce the cbETH- USD trading pairs in different phases.