What Is CDCETH and How Does It Work?

CDCETH allows liquid staking for ETH with Crypto.com. Here’s why this can earn you more rewards than traditional staking.

Feb 22, 2024
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What Is Cdc Eth

Key Takeaways:

  • CDCETH stands for Crypto.com Staked ETH, a receipt token representing staked Ether (ETH) in the Crypto.com App and on the Exchange.
  • Unlike traditional staking, liquid staking enables token holders to use and potentially trade their staked assets while still earning rewards.
  • Liquid staking offers flexibility, allowing traders to use staked assets for other financial activities without unstaking.
  • CDCETH can be unwrapped to staked ETH at any time based on the prevailing conversion rate, ensuring a smooth and convenient liquid staking process.
  • Liquid staking is available to Crypto.com App and Exchange users in most jurisdictions.
  • Users can wrap and unwrap their staked ETH into CDCETH at any time, as it’s not subject to Ethereum’s on-chain unbonding period.

What Is CDCETH?

Crypto.com Staked ETH (CDCETH) is a receipt token that represents your Ether (ETH) staked in the Crypto.com App and on the Exchange. It indicates any staking rewards it accrues.

This token can be used for liquid staking — an alternative to traditional staking that allows you to still access your staked tokens.

Get the full scope in the CDCETH white paper.

How Does Liquid Staking Work?

Liquid staking is a way for people to still use tokens while they are staked.

Here’s how it works: When someone stakes their tokens with a liquid staking protocol, they get a special receipt for their staked tokens in the form of a liquid token. This receipt lets them keep using their tokens for things like buying and selling while still having the chance to earn rewards on their staked tokens. 

Unlike regular staking, where tokens are ‘locked up’ and can’t be used, liquid staking allows token holders to have the best of both worlds — they can use their tokens and earn staking rewards at the same time. In other words, you get the benefits of staking without giving up the flexibility of using your tokens. 

This new way of earning rewards is making it easier for more people to get involved in staking and potentially grow their holdings.

Learn more about liquid staking here.

How to Use CDCETH

As mentioned above, CDCETH is used for liquid staking in the Crypto.com App. Let’s take a closer look at how that works.

When you stake ETH on Crypto.com, you receive staking rewards on a regular basis based on the Ethereum blockchain. These staking rewards are credited to your available balance in ETH. 

Users can wrap every ETH they staked with Crypto.com and receive CDCETH. Now you are a CDCETH holder and entitled to CDCETH staking rewards. 

These staking rewards will be reflected through the increase in the conversion rate of CDCETH to staked ETH (instead of receiving ETH rewards directly in their accounts). CDCETH holders can redeem their rewards by unwrapping their CDCETH, where they will then receive staked ETH based on the conversion rate at the point of unwrapping. 

Learn more about how the conversion rate is calculated here.

Advantages of Liquid Staking

Liquid staking offers several compelling advantages. Below are four reasons liquid staking is becoming increasingly popular:

Enhanced Flexibility

One of the key advantages of liquid staking is the flexibility it offers to token holders. Unlike traditional staking, where tokens are locked up for a specific period, liquid staking allows participants the opportunity to continue using their tokens for various activities, such as trading or making purchases, while still potentially earning staking rewards. This flexibility is particularly appealing to crypto holders who seek to maintain liquidity in their assets.

Maximised Utility

Liquid staking enables token holders to extract utility from their staked assets. By receiving a liquid synthetic token in return for their staked tokens, participants can utilise their assets for additional trades or transactions, thereby maximising the utility of their cryptocurrency holdings.

Potential for Increased Participation

The introduction of liquid staking has the potential to attract a broader range of participants to cryptocurrency staking. Its user-friendly approach and ability to offer rewards without sacrificing liquidity may encourage more individuals to engage in staking activities, thereby expanding the overall participation in blockchain networks.

Earning Rewards Without Sacrificing Liquidity

Liquid staking offers the chance to allow participants to enjoy the benefits of staking rewards without compromising the liquidity of their assets. This means that participants can potentially earn passive income while retaining the freedom to use their tokens as they see fit, providing a balanced approach to value accumulation.

In essence, the advantages of liquid staking are clear — it brings flexibility, utility, and the potential for increased participation to cryptocurrency staking, thereby offering a more accessible and dynamic investment avenue for a broader spectrum of traders.

Why Wrap ETH into CDCETH?

So what do the advantages listed above look like with CDCETH in the Crypto.com App?

The main advantage of liquid staking is that the staked tokens remain liquid and can be used to earn additional rewards. While staked ETH is not liquid or transferable and cannot be used for anything other than securing and validating the blockchain, CDCETH can. For example, CDCETH holders can participate in DeFi platforms and protocols like VVS Finance

Finally, CDCETH can be unwrapped to staked ETH at any time based on the prevailing conversion rate, making the liquid staking process very smooth and convenient.

Who Can Receive CDCETH?

Liquid staking is available to users via the Crypto.com App in most jurisdictions. Get more details here.

How to Buy CDCETH

As mentioned above, you can receive CDCETH as a wrapped token if you stake ETH in the Crypto.com App. To receive CDCETH, users first have to buy and stake ETH and then can receive CDCETH by wrapping it in the App.

In addition, users can also buy CDCETH directly on the Crypto.com Exchange, and a growing list of compatible DeFi protocols like VVS, accessible via the Crypto.com DeFi Wallet.

Conclusion

By combining the benefits of staking with the flexibility of accessing liquidity, liquid staking with CDCETH opens up new possibilities for crypto holders. 

CDCETH makes liquid staking available for Crypto.com users all within the App and without the need to access an external DeFi protocol to wrap and stake liquid tokens. You can wrap and unwrap your staked ETH into CDCETH at any time for additional liquid staking rewards, but users must still follow Ethereum’s unbonding period when unstaking their ETH.

Due Diligence and Do Your Own Research

All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, cybersecurity, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy, or sell any coins, tokens, or other crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.

In addition, the Crypto.com Exchange and the products described herein are distinct from the Crypto.com Main App, and the availability of products and services on the Crypto.com Exchange is subject to jurisdictional limits. Before accessing the Crypto.com Exchange, please refer to the following link and ensure that you are not in any geo-restricted jurisdictions.

Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.

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