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Coinbase Wrapped Staked ETH (cbETH)

Coinbase Wrapped Staked ETH (cbETH) is a token that represents through . [1][3]

Overview

cbETH was developed by and introduced on August 24, 2022. users can wrap their locked staked ETH to receive cbETH, which is an asset that can be traded, moved on-chain, and used in and other . cbETH is known as a liquid staking token because it allows holders to get the benefits of without lockups or unbonding periods. [3][4]

"Coinbase Wrapped Staked ETH (cbETH) is a utility token that represents ETH2, which is ETH staked through Coinbase. cbETH can be sold or sent off-platform, while ETH2 will remain locked-up until a future protocol upgrade." - the Coinbase team tweeted[4]

Technology

cbETH is a standard token designed using the cToken model — a model created by to represent depository assets in their protocol and it can be or according to a floating conversion rate. At a high level, this conversion rate tracks the underlying staked ETH to account for staking/unstaking activity, rewards, penalties, and fees. [2]

This allows users to move between and cbETH (once unwrapping is available) under constantly changing network conditions. It also means that ETH and cbETH are not pegged or expected to be interchangeable. There are no lock-up or minimum deposit requirements when staking with . [2][6]

Utility

cbETH enhances interoperability and offers users the ability to navigate different . By converting ETH into cbETH, users can utilize it as collateral on lending platforms. This approach enables them to maintain ETH rewards while managing their capital across various DeFi platforms. [2][3]

Coinbase addresses the challenge of trading positions when users have their tokens locked in the Beacon chain while outside liquid protocols. To overcome this limitation, Coinbase provides users with the option to convert their ETH at the prevailing conversion rate into cbETH. Subsequently, they can trade cbETH at the current market exchange rate, enabling them to actively manage their positions even while their tokens are staked in the Beacon chain. [5]

Lastly, transferring staked cbETH provides users with the option to move their assets to different destinations. This can be useful for scenarios such as sending to a friend, selling, or switching to another non-custodial wallet. [5]

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Coinbase Wrapped Staked ETH (cbETH)

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