By Richard Davis
With the surge in popularity of cryptocurrencies, many are looking for ways to earn passive income on their holdings. One of the methods that has gained traction in recent years is staking, and Coinbase, as one of the world’s largest cryptocurrency exchanges, has made it simpler than ever for its users.
Coinbase offers its users a straightforward approach to staking, removing much of the complexities that come with self-staking or using other platforms. By staking on Coinbase, users can earn rewards without needing to deal with the technical details of setting up and maintaining nodes or choosing validators.
In this guide, we will walk you through the step-by-step process of setting up cryptocurrency staking on Coinbase.
Guide to Staking on Coinbase
We’re diving into the straightforward process of staking cryptocurrencies on Coinbase. In this guide, we’ll use Ethereum as our exemplar. Staking Ethereum directly might feel daunting with tools like Ledger Live, but staking through Coinbase simplifies this.
Staking via Coinbase provides an easy entry for beginners wanting to venture into Ethereum staking. The combination of minimal technical hurdles, cost-effectiveness, and robust support make it the choice for many.
For clarity, before staking any crypto on Coinbase, ensure you have a registered account and the desired staking asset available in your wallet.
Coinbase Staking in 6 Easy Steps
Step 1: Sign into your Coinbase account. Direct your attention to the “Earn” option, visible on the right of your dashboard. Click on it.
Step 2: Navigating to the Coinbase Earn section will reveal available assets for staking under the “Get Started” header. Opt to “Stake ETH”. In scenarios where you don’t possess stakable assets, Coinbase will display purchasable assets and their associated staking APY.
Step 3: Upon selecting “Stake ETH”, a dialogue box appears. Either confirm with “I Understand” or delve deeper into the staking intricacies by selecting “Learn More”.
Step 4: Specify the ETH quantity you aim to stake. The option to “Stake All” is available for those wishing to commit their entire balance. Confirm your decision with “Continue”.
Step 5: A summary will be displayed detailing your staking amount, expected rewards, and terms and conditions. Once satisfied, finalize with “Stake Now”.
Step 6: A confirmation notification signifies your successful staking submission to Coinbase Earn. To track your accruing rewards, revisit the Earn page.
And voilà! Your assets are now actively staking on Coinbase Earn. Rewards are periodically updated and can be viewed on the Earn page.
Is It Safe to Stake Through Coinbase?
Staking with Coinbase is indeed secure. Your core balance remains unaffected and free from risks. While staking ETH once posed uncertainties, especially concerning the Merge’s completion impacting reward distribution, such concerns dissolved with ETH’s successful transition from proof of work to proof of stake. As a result, staking any asset on Coinbase is currently risk-free.
It’s noteworthy that the SEC has been investigating some exchanges offering staking services, Kraken being a notable example. Yet, Coinbase, a publicly traded entity, remains untouched. Future actions in this domain remain to be observed, but it’s clear staking will continue to thrive globally.
How Do Returns on Coinbase Stack Up Against Other Staking Platforms?
When juxtaposed with other platforms, Coinbase’s staking yields are on par. Exchanges like Binance and KuCoin might tempt users with high-return staking ventures, albeit with increased risks. On the contrary, if you choose to stake assets directly, say, delegate Cardano to a validator on its native blockchain, the annual return averages around 4%. This is relatively higher than Coinbase’s 2% offer. However, it’s a trade-off between slightly diminished returns and the ease and simplicity of Coinbase’s Earn scheme.
Conclusion
In summary, staking on Coinbase is straightforward: create an account, deposit, and stake your chosen coin. However, ensure the coin is stakable on Coinbase and meets your criteria. While the rewards are enticing, always remain aware of the associated risks.
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