Coinbase Wrapped Staked ETH

cbETH

cbETH is a representation of ETH staked through Coinbase.

Risk Rating
Best
$3,352.66
2.06%
Summary
What we like
Enables users to to earn staking rewards with any amount of ETH (minimum of 32 ETH requirement to become a full validator) while retaining liquidity of locked ETH.
What we like less
Greater centralization risk given exposure to Coinbase smart contracts, which has the ability to blacklist any token address. cbETH is also less liquid than ETH and users must go through an exit queue to redeem back their underlying ETH.
What it means for you
cbETH provides an easy-to-use instrument to gain exposure to ETH staking rewards that users can access directly through the Coinbase app.
Information
Blockchain
  • Ethereum
Key Metrics
  • Market Cap: $572.3M
  • Fully Diluted Valluation: $4.9B
  • FDV / MC: 8.5
  • Ranking inside Exponential (excluding stables): #28
  • Circulating Supply: 170,933
  • Total Supply: 1,456,716
  • Volume (24H): $6.9M
  • ATH: $4,335.70 (03/12/2024)
  • ATL: $1,036.96 (11/09/2022)
Risk Assessment
Best
Asset Strength

cbETH is a mid-cap, fully collateralized asset. This asset depends on a centralized entity for custody services. This asset is exposed to the underlying risks of Coinbase Liquid Staking, a protocol rated as Average.

Asset Tokenomics

cbETH has an uncapped supply but has inflation control or burn mechanisms in place. cbETH is backed 1:1 by ETH staked on the Ethereum blockchain. The asset accrues staking rewards automatically. cbETH can trade at a discount to 1 ETH as it is less liquid, has less utility (cannot be used to pay for gas fees), can be blacklisted, and has more technical risk (Coinbase smart contract bugs).

Asset Volatility

cbETH is highly correlated to the overall market. cbETH can trade at a discount to 1 ETH as it is less liquid, has less utility (cannot be used to pay for gas fees), can be blacklisted, and has more technical risk (eg Coinbase smart contract bugs).

Dependencies

Coinbase Liquid Staking

Things to know about cbETH

What is Coinbase?

Coinbase is a top US exchange that holds custody of user assets. It has built its own liquid staking platform for Proof-of-Stake blockchain assets that allows users to stake their assets without needing to lock assets or maintain the required infrastructure. This enables users to continue participating in DeFi activities related to lending and market making, while Coinbase acts as the staking provider and token issuer.

How does cbETH work?

Users receive cbETH tokens when staking their ETH through Coinbase. cbETH follows Compound's cToken model and can be minted or burned based on a floating conversion rate. The conversion rate tracks the underlying staked ETH to account for staking/unstaking activity, rewards, penalties and fees. This means ETH and cbETH are not pegged or interchangeable at a 1:1 ratio. As the underlying staked ETH continues to accrue rewards, cbETH is expected to represent more staked ETH, which should lead to a divergence in prices over time. There are no lock-up or minimum deposit requirements when staking with Coinbase. Coinbase charges a 25% fee on all generated rewards.

How to redeem back for ETH?

ETH deposited Coinbase are subsequently locked into the Ethereum PoS deposit contract. The staked ETH is now withdrawable following the Shanghai upgrade. Users must go through an exit queue in order to withdraw their underlying ETH. Users can always exchange their cbETH for ETH through exchanges that offer liquidity like Uniswap's cbETH-ETH pool. Please note, the price of cbETH is determined by the market and is not pegged or maintained by Coinbase.

cbETH Pools
Uniswap ETH Market Making
6.8%
Yield
$5M
TVL
Risk
B
Protocol
Uniswap V3
Chain
Ethereum