Coinbase, a major cryptocurrency exchange, revealed Thursday that it will give those who participate in Ethereum an ERC20 interest token called Coinbase Wrapped Staked ETH (cbETH) to represent their Ethereum stake reward.
Coinbase stops Ethereum withdrawals and deposits at this time!
The platform noted that the main advantage here is that cbETH can be sold, transferred and spent, as the tethered ETH is currently secured until the Shanghai protocol upgrade is completed. cbETH tokens can also be transferred to an off-platform wallet and traded from there, and the cbETH launch comes ahead of the Ethereum consolidation scheduled for next month.
Coinbase explained that the unpredictability and lack of liquidity limit the willingness of Ethereum holders to participate, reducing the security of the network. Even worse, the Ethereum stake cannot be used for anything else like collateral in DEFI, making the ETH token itself less useful.
Earlier, it was reported that Coinbase, the largest cryptocurrency exchange in the United States, intends to suspend Ethereum-based withdrawals and deposits during the upcoming merger upgrade next September.