Is there a wrapped stablecoin that has mechanics similar to cbETH? i.e. the price in USD keeps increasing based on the interest earned / accrued by the underlying asset in custody. Effectively a "saved dollar" coin.

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that is how the 4626 aave wrapper in Teams works :)

btw is the interest on cbeth better than wsteth (the non-rebasing version of lido's staked eth)? if not, why use it?

I don’t know what the interest difference is or where to find it, but if I’m deploying company funds cbeth is a low effort and safe pick