Coinbase adds ‘ETH2’ despite tomorrow’s Ethereum upgrade postponing difficulty bomb

But ETH2 is not a new cryptocurrency and the exchange appears to be prepping for Ethereum’s transition to Proof-of-Stake.

Cryptocurrency exchange Coinbase has added a mirrored version of the Ethereum blockchain’s native token Ether (ETH) to its crypto price index, just ahead of a key network upgrade on Dec. 10.

Dubbed “ETH2,” the symbol appeared to have been tracking the original Ether market data synchronously. For instance, the cost to purchase ETH2 came out to be the same as that for ETH. Meanwhile, their market capitalization, volume, circulating supply, and price changes were also identical.

Coinbase is already promoting eth2 as a new coin? pic.twitter.com/C67UxooLU0

— Nuno (@nvcoelho) December 6, 2021

Nonetheless, unlike the original, the ETH2 token had no Trading Activity, Popularity Score, or Typical Hold Time, underscoring that its role — for now — is to merely track the ETH market data at least until mid-2022.

That would remove the need for each node to scan the entire chain, theoretically improving the speed and costs required to maintain the network. Meanwhile, individual shards would share the transaction details with a so-called Beacon Chain, which serves as the backbone of Ethereum 2.0.

ETH2 is not a new crypto

Beacon Chain, which went live in December 2020, would validate the transactions on each shard, thus assisting the entire Ethereum 2.0 network reach consensus. It would also detect dishonest validators and initiate penalties by removing a portion of the validator’s stake from circulation.

Related: Vitalik Buterin outlines ‘endgame’ roadmap for ETH 2.0

At the core of Ethereum 2.0’s PoS design would be ETH (or ETH2), which primarily serves as a staking token for validators to participate in the network consensus and, in turn, to receive block rewards for it.

Beacon Chain’s deposit contract has received over 8.42 million ETH tokens from 55,300 unique depositors (validators) since its launch in December 2020.

That being said, ETH2 is not a new coin and would not change the ETH amount one holds. Instead, as Coinbase’s index listing suggests, ETH2 may end up becoming a rebranded version of the original Ether, without needing holders to swap one version for another.

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