As per a Feb 16 tweet from Coinbase, clients will soon be able to earn up to 7.5% Annual Percentage Yield (APY) in staking rewards for holding ETH.
The US-based exchange had earlier promised it would support the rebooted ETH network. It has now kept its promise by unveiling plans to offer rewards to customers who stake ETH into the Beacon Chain smart contract.
A recent blog post shared to reporters reveals that Coinbase has opened its waitlist for users interested in staking all or a portion of their ETH holdings.
“By joining the waitlist today, customers will be first in line to earn ETH2 staking rewards. Getting rewarded with different cryptocurrencies is one of our top requests,” the exchange explained.
Once off the waitlist, users can convert, stake, and earn rewards on all or part of their ETH balance and track their earnings in real-time. There is no minimum staking amount required.
To start staking on ETH 2.0, users must reside in a jurisdiction where the service is allowed and have their identity verified with a valid TIN on file.
Coinbase Extends Its Support for ETH 2.0
Coinbase has finally decided to join the staking party on Ethereum two months after Beacon Chain’s launch.
Ethereum’s ambitious migration to a proof-of-stake (POS) network has so far received tremendous support from the ETH community. At the start of this week, the total value locked under the network’s deposit contract crossed 3 million (about $5.4 billion).
Coinbase now joins other exchanges that started offering ETH 2.0 staking shortly after Beacon Chain’s rollout, including OKEx, Binance, Huobi and Kraken. Popular web wallet MyEtherWallet supports in-app deposits into the Beacon Chain contract as well.
Besides the ETH staking option, Coinbase also plans to introduce staking for Tezos, Algorand and Cosmos tokens. The leading exchange has introduced these diverse staking options just days after Ethereum co-founder Vitalik Buterin tabled plans for the first hard fork of the ETH 2.0 network.
In a note published on Feb 15, Buterin proposed introducing upgrades to the recently launched Beacon Chain. The most prominent proposal is “light client nodes” with minimal resource requirements that can run on mobile devices.
How Staking Works on ETH 2.0
The ETH network is currently transitioning into a POS consensus mechanism, allowing nodes to validate transactions and produce new blocks based on their ETH stake instead of computational power.
To claim a stake in ETH 2.0, users must first deposit legacy ETH into the network’s contract to convert it to Beacon Chain ETH (BETH).
Crypto holders are currently unable to withdraw or sell the ETH portion they stake on the deposit contract, which currency holds $5.5 billion worth of Ether.
However, according to Rhea Kaw, a senior product manager at Coinbase, the exchange is working on getting around this restriction; it promises to offer an avenue for users to trade their staked Ether very soon.