US cryptocurrency exchange Coinbase (COIN) has introduced a feature that will help customers recover more than 4,000 unsupported ERC-20 tokens sent to its ledger.
ERC-20 tokens are, in principle, smart contracts that are executed on the Ethereum blockchain. They function within a programmatic scheme established by the Ethereum team. This schema is broad enough to allow for different uses without disrupting the functioning of the Ethereum blockchain.
Coinbase states in this regard:
“Our recovery tool can move unsupported resources directly from your inbound address to your self-custodial wallet without exposing private keys at any time.”
Coinbase (COIN) and the recovery tool
An untold number of ERC-20 tokens have been lost due to Coinbase‘s incompatibility with exchanging them, starting today a new feature will be able to recover lost tokens in the Ethereum network.
“We don’t make any quality representation of assets because they haven’t gone through our review process, but we are facilitating the returns that accidentally sent it in the first place.”
This is how Coinbase executives explained the matter.
The feature will be available in the coming weeks for customers, except those in Japan or Coinbase Prime users. There will be a 5% recovery fee for amounts over $100 in addition to a separate network fee that applies to all recoveries
The industry-first solution provides customers with a simple, safe and secure way to recover nearly 4,000 unsupported ERC-20 tokens that were mistakenly sent to a Coinbase address. In the coming weeks, all eligible customers will have access to the asset recovery tool.
To recover the funds, customers only need two things: the Ethereum TXID for the transaction where the asset was lost and the Coinbase address where the asset was lost.
What is an ERC-20 token
An ERC-20 token is nothing more than a smart contract that has a predetermined data structure. This structure is intended to facilitate the implementation of various features on the Ethereum blockchain, making it easier for developers to create.
It is this enormous flexibility that has led ERC-20 tokens to become a standard. The main utility of these tokens is to standardize the interface for creating and issuing new tokens on the network. This is achieved by applying certain rules and parameters for its acceptance. For example, Ether is required to modify or move an ERC-20 token. This situation supports both the economic and utility parts of the token.
Some of the most popular ERC-20 tokens are Uniswap (UNI), Aave (AAVE), 0x (ZRX), and Chainlink (LINK).
Prior to the launch of the tool, customers sending unsupported ERC-20 tokens to a Coinbase address would receive a notification saying that the funds had been delivered, but had not actually been sent to the recipient’s wallets. This would cause the loss of such tokens and associated funds.
Some of these tokens can now be recovered, according to Coinbase, if users can provide their Ethereum transaction ID for the lost assets and its contract address.
Source: https://en.cryptonomist.ch/2022/12/16/coinbase-coin-launches-tool/