Coinbase introduces its liquid staking token ahead of the Merge

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Crypto exchange Coinbase has launched the Ethereum Liquid Staking token ahead of the migration to Ethereum’s Proof of Stake protocol.

Coinbase, one of the world’s leading crypto exchanges, announced a . done through Tweet On Wednesday, August 24, it launched its liquid staking token, Coinbase Wrapped Staking ETH (cbETH).

This latest development comes weeks before the Ethereum merge, an event that will move the Ethereum blockchain from its current proof of work to a proof of stake mechanism.

Coinbase wrote that Coinbase Wrapped Staking ETH (CBETH) is a utility token that represents ETH 2, which is ETH through Coinbase. cbETH can be sold or sent off-platform, while ETH2 will remain locked until future protocol upgrades.

The crypto exchange said that the price of cbETH is not meant to track the price of ETH 1:1. cbETH represents the staked ETH and all of its accrued staking interest when the conversion rate and balance of cbETH was initiated.

Coinbase said holders of ETH2 (while betting ETH on Coinbase) can “wrap” their ETH2 and receive cbETH through its website. Coinbase said that the wrapping functionality will be rolled out progressively throughout the day for eligible users.

Liquid staking enables investors to generate additional income on top of the standard rewards that they make for betting or locking coins in a network.

With liquid staking, coins with locked staking are “wrapped” in transferable tokens, which represent ownership of the underlying staking asset and any rewards earned.

The tokens generated from Liquid Staking are fully transferable and can be opened to redeem the underlying staking assets.

Coinbase intends to see mass adoption of its cbETH token, which will have multiple uses following the migration to Ethereum. in his white paperCoinbase said;

“Our hope is that CBETH will achieve strong adoption for trading, transfer and use in DeFi [decentralized finance] Application. With cbETH, Coinbase aims to contribute to the broader crypto ecosystem by creating high-utility wrap tokens and open-sourcing smart contracts.”

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