Coinbase unveiled its plan to add support to Ethereum Classic (ETC) as its fifth cryptocurrency on Monday. In the next few months, the technical integration of the digital asset will take place prior to announcing the listing and, eventually, allowing ETC trading.
Earlier this week, it was revealed that a new digital asset would be available for both individual and institutional investors soon. The choice was a bit surprising for most customers, who were rather guessing that XRP, EOS or even TRX had a better shot at being selected by the company.
Back in March 2018, Business Insider reported that an imminent XRP listing in Coinbase could take place. In fact, just the night before Ripple CEO Brad Garlinghouse and Coinbase President Assif Hirji were scheduled to speak at CNBC’s Fast Money, rumors have surfaced that having both of them in the interview was intended to announce the listing publicly.
An Odd Choice of Asset
Many were surprised about the choice of Ethereum Classic. In fact, ETC is only the 18th cryptocurrency by market capitalization and is valued at 1.4 billion as of press time. Moreover, the announcement came amidst long-lived speculation that placed Ripple’s XRP as the top contender among digital assets, potentially, to join Coinbase next.
Coinbase claims that the announcement was made at the same time, internally and publicly, with respect to their process of listing new tokens.
The choice of ETC was not explicitly explained in the announcement. However, the FAQ section recalls the company’s intention to increasingly support ERC20 tokens and Bitcoin forks.
The process for selecting new assets established by Coinbase, reportedly, subjects potential listings to a thorough legal and risk assessment procedure after an initial recommendation is made by their internal asset selection committee.
Ethereum Classic will integrate most of Coinbase’s products, according to reports. The institutional suite of products recently launched by the company, such as Coinbase Prime and Coinbase Custody), will see the trading support of the new asset as soon as the launch date is made public.
Following the company’s internal trading rules, Coinbase Pro, which is the new product that will replace GDAX for individual investors later this month, will offer an ETC trading pair once the official launch takes place. Orders will first be placed in “post-only” mode until sufficient liquidity is established before the trading begins.
On the other hand, Coinbase wallet will not add the asset at the time of the launch. The post explained that this will only happen after evaluating several factors and market health metrics, such as price stability and asset liquidity to name a few.
What’s Ethereum Classic
Ethereum classic is an offshoot of Ethereum that was created two years ago. In fact, on June 17, 2016, a hacker exploited a loophole in the DAO’s smart contract and siphoned away as much as $50 million worth of Ether.
The stolen funds were raised during an ongoing record-breaking ICO launched by the ambitious project at the time. The Ethereum community had diverging opinions on how to handle the incident back then.
One side suggested forking from the original chain to reverse the hack and return the stolen funds to their original owners. The other strongly opposed the fork for ideological reasons.
The fork-opposing side argued that altering the Blockchain opposes Ethereum’s philosophy of immutability prevailing the code, and trusting the smart contract under all circumstances. Consequently, they decided to stick with the original chain, which became Ethereum Classic.
The other majority, including co-founders Vitalik Buterin and Gavin Wood, carried on a hard fork and branched off the main Blockchain at height 1,920,000 right before the hack occurred. The novel Blockchain kept the name Ethereum and named its fuel Ether, ETH.
Ethereum, which has long been listed on Coinbase, is currently the second highest valued cryptocurrency with a total market cap of over $52 billion, according to CoinMarketCap.
