cbETH (Coinbase liquid staking token) has a blacklist function that allows them to censor token holders, similar to USDC. This is a big risk and makes cbETH among the worst staking derivatives

Recently Coinbase launched the cbETH liquid staking derivative product on mainnet, which aims to compete with Lido stETH, Rocketpool's rETH, Stakewise and similar onchain staking derivative products.

However cbETH has a blacklist function, similar to USDC which does not exist in the two main competitors - Lido and Rocketpool.

This function allows Coinbase to blacklist wallets which hold cbETH, similar to how they already do with USDC.

cbETH Blacklist function

This is not present in any of the other liquid staking products from competitors. It makes cbETH a highly risky product, given the regulatory risks in the space. No wonder cbETH trades at a 6% discount to spot.

Post-merge, it is expected that staking activity will increase given that the risk of the merge is one of the key criteria for users avoiding staking so far - therefore, it is worth keeping in mind when evaluating liquid staking products.

For a detailed comparison of 3 liquid staking options, please see this infographic.

Thanks to curvemarketcap for this infographic!

As you can see, Rocketpool stands out as the most decentralized option