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The new financial instrument launched by Coinbase is a great example of how the company prepares for the upcoming merge. Coinbase said that it will be listing Wrapped Staked ETH which will go on the market under the abbreviation cbETH. It is a new token that will be released as an ERC-20 standard asset on the Ethereum network. The new token will allow users of the exchange to receive new rewards for staking their ETH coins.
The trading will start on August 25. It is a new foray for Coinbase that claims that the new token will have high utility and act as an additional smart contract issued on the ETH network. However, it should be noted that the token will not be transferable across any other networks, only ETH 2.0 will be used. If you attempt to send these tokens using any other network, you will lose them. Be careful.
cbETH is a compound token fully compatible with a wide range of dApps and DeFi projects through the ERC-20 standard. Note that these tokens are not pegged and cannot be exchanged 1 to 1 with ETH, but they will act as a reward for staking the ETH tokens that you keep on the balance sheet of the exchange.
The merge is supposed to start on September 6 and be finalized on September 15. The community is waiting in excitement, but many experts warn crypto enthusiasts about the future of the project. We recently mentioned that you should try to liquidate at least some of your holdings as there is a possibility that ETH will lose over 60% of its value with the worst-case scenario being ETH hitting the low of $400 by the end of September.
Whether you should stake your currently held ETH is a completely different question. If you want to earn some rewards and anticipate that the merge will have a positive effect on the network, you should stake your holdings and wait for a good moment to cash out. Otherwise, consider diversifying your investments.
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