Cryptocurrency exchange Coinbase has announced that it will be adding support for ERC20 tokens “in the coming months”, prompting a slight price rise across the board for ERC20 assets in trading markets.
The first step will involve its “Custody” team in a process to evaluate a set of ERC20 assets to support for withdrawal and deposits. Having identified them, it will seek to obtain regulatory clarity for selected assets, which will first be listed on its Global Digital Asset Exchange (GDAX) exchange and trading platform.
Coinbase has a policy of monitoring performance digital assets listed on its GDAX exchange, eyeing aspects of “market health metrics” such as liquidity and price stability before eventually offering them on its flagship Coinbase exchange, which offers easier buying and selling of major cryptocurrencies in exchange for fiat currencies in over 30 countries.
Despite the lack of announcements to list specific tokens, speculators reacted to the news by buying up ERC20 tokens believed most likely to make the cut. This resulted in a noticeable surge in prices of 0x (a protocol for trading tokens) and REP (ERC20 token native to the Augur predictions platform), offering some respite to an altcoin market weary from weeks of diminishing prices.
Things did not go too well the last time Coinbase added a new asset to its exchanges, as its botched addition of Bitcoin Cash saw live trading moments before the official announcement. Several traders apparently took advantage of the momentary spike in price, leading to accusations of insider trading and fraud.
Coinbase has no plans to add any approved ERC20 tokens to its Coinbase Commerce service.
ERC20 tokens are digital assets created using the official Ethereum Request for Comments (ERC) protocol 20 for proposing improvements to the Ethereum network. There are several protocols, among which ERC20 has been the most popular, with the majority of projects launching since 2017 creating smart contract tokens on the Ethereum blockchain that comply with the ERC20 protocol.
To date, over 500 ERC20 tokens are actively trading, as tracked by CoinmarketCap.