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Coinbase Now Offers Ethereum 2.0 Staking Rewards

April 21, 2021 9:06 am
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Coinbase Now Offers Ethereum 2.0 Staking Rewards

Major U.S. crypto exchange Coinbase Global Inc. (NASDAQ:COIN) opened the waitlist for earning staking rewards through Ethereum (CRYPTO: ETH) 2.0 staking.

What Happened: Coinbase has started to roll out Ethereum 2.0 staking rewards for its customers two months after first opening the waitlist for the new feature, according to the company's tweet from April 16.

Users who have access to this feature can lock their Ether cryptocurrency in exchange for up to 6% of interest per year.

There is no guaranteed interest rate, instead, it is tied to demand, and the more people stake, the lower the rewards are expected to be.

Why It Matters: Ethereum is transitioning from proof-of-work (PoW) to proof-of-stake (PoS).

PoS blockchains use relatively low-power computer stake crypto assets and confirm transactions on the network.

Users involved in staking engage in the activity knowing that if they tried to act in a way that does not conform with the network's rules, their stake would be "slashed," and they would lose money.

To start staking on your own, at least 32 Ether are required, but Coinbase pools user funds together to allow anyone to earn staking rewards, no matter how many coins they own.

The downside is that users would not be able to send, sell or trade staked Ether yet, but the exchange "expects to offer a way to trade any staked Ethereum in the coming months."

See also: How to Stake Ethereum

Ethereum developers already deployed a PoS version of the network, although its functionalities are still limited, compared to the original, it has higher throughput and lower transaction cost.

In the future, the Ethereum community hopes that this network will completely replace the original one and scale enough to deliver on the promise of Ethereum being the "world computer."

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