The Ethereum (ETH) network will soon receive support for Coinbase (NASDAQ:COIN) Wrapped Staked ETH (cbETH), which will have open-source contracts and audits made available to the public.
The move is expected to make it easier for other organizations, such as decentralized finance (DeFi) protocols, to decide whether to add support for the token.
According to Coinbase, users who stake ETH on the cryptocurrency exchange can obtain Coinbase Wrapped Staked ETH, which is a liquid representation of their staked ETH.
CbETH is an ERC20, or Ethereum Request for Comments 20, utility token. It will be released just before the merge of the Ethereum network, which will be completed between Sept. 10-20.
The tokens, however, will be accessible for trade on Aug. 25 if the liquidity requirements are satisfied.
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With the most recent push, Coinbase wants to encourage widespread token use and anticipates having a number of use cases for trading, transferring, and using in DeFi apps after the merge.
Also, investors can use cbETH to:
- Withdraw their staked ETH for cash
- Move their staked ETH to another non-custodial wallet
- Deposit cbETH into a protocol as security.
Since it is intended to serve as a cToken, or compound token, cbETH may be used with other decentralized apps already available in the DeFi ecosystem.
“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," Coinbase stated.
SEC Subpoenas Coinbase
The U.S. Securities and Exchange Commission (SEC) is currently looking into how Coinbase handles its staking programs, stablecoins and yield-generating products. The agency also wants additional information regarding how Coinbase categorizes and lists digital assets.
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