Yesterday, cryptocurrency wallet and services provider, Abra, announced that users can now purchase Ethereum through its Android and iOS apps. You’d be forgiven if you thought this was already the case, but it wasn’t. Let me explain.
With the new update, users can now add and withdraw actual Ethereum cryptocurrency to and from their Abra wallet. Before the update, any exposure to Ethereum on Abra was through one of its “synthetic assets,” which means you buy into the token without actually owning it.
Abra also sees this addition as the first step to streamline the “process to add more ERC20 tokens in the near future,” the blog post reads. This appears to be a growing trend, in 2018 Coinbase doubled the number of tokens it offers.
Abra is very much seeing this addition as an entry point to its app for Ethereum holders. Once a user has Ethereum in the app, it can’t be used to invest in other assets, including 50 fiat currencies, 30 cryptocurrencies, and Abra’s proprietary “BIT10 crypto index” token.
Here’s the thing, only four of those 30 cryptocurrencies are supported natively: Bitcoin, Bitcoin Cash, Litecoin, and now, Ethereum. Investments in the other 26 are all based around Abra’s wildly complicated synthetic asset model.
Put simply, if you invest in one of these non-native cryptocurrencies in Abra, you are given simulated exposure to the coin in which your chosen digital asset is used to collateralize your investment. The value of your investment goes up and down in line with the value of the coin you invested in. It’s important to note that, in this case, you do not own the token; you can’t send the tokens to another wallet and you can’t use them to pay for things either.