San Francisco-based cryptocurrency exchange Coinbase found itself at a critical juncture on June 6, 2023, as the United States Securities and Exchange Commission (SEC) lodged a lawsuit against the platform. Among the SEC’s complaints was the allegation that Coinbase had failed to register its staking-as-a-service program. This legal action has had a significant impact, as recent statistics from Dune Analytics reveal an influx of redemptions for Coinbase’s CBETH, a product allowing users to stake ether on the exchange.
On June 6 alone, an astonishing 27,280 CBETH tokens were redeemed, followed by an additional nearly 9,000 tokens the following day. As of June 8, over 3,400 CBETH tokens have already been redeemed. It’s noteworthy that Coinbase, currently the second-largest liquid staking service provider in terms of ETH held, has locked up a substantial 1,106,424 ether.
Based on prevailing exchange rates, Coinbase’s ether holdings are valued at $2.12 billion. Among the 20 liquid staking providers, Coinbase’s CBETH represents a noteworthy 11.46% of the 9,650,762 ETH locked into decentralized finance (defi) protocols. However, compared to Lido Finance’s impressive stash of ether, Coinbase’s market share appears relatively modest.
Lido Finance’s protocol currently dominates the market, with an astonishing 7,155,072 ETH, accounting for a staggering 74.14% of the market share. In contrast, Coinbase’s CBETH has experienced a 3.56% drop in the last 30 days and a 2.28% decrease over the past seven days.
If the trend of CBETH redemptions persists, Rocket Pool may surpass Coinbase as the second-largest market share holder. At present, Rocket Pool holds 761,641 ether, which is 344,783 ether less than Coinbase’s current count.
