Coinbase Staking Rewards
When it comes to crypto mining to earn rewards, the proof of work (PoW) consensus mechanism has always been the notable reward system for crypto miners.
This reward mechanism is rewarding but comes with lots of vices such as heavy power consumption, purchase of expensive mining hardware, technical know-how, and choosing the right mining software.
Since Bitcoin adopts the PoW technology, and Ethereum does as well, developers have built on the existing technology to develop a faster and scalable blockchain technology known as the proof of stake (PoS) consensus mechanism.
Staking requires no mining equipment, it is seamless, less brain-tasking, and can be executed through an exchange like Coinbase. If you wish to stake with Coinbase and don’t have an account, you can join Coinbase here.
At Coinbase, you can stake a variety of tokens that adopt the proof of stake mechanism such as ALGO, Tezos. ETH and Cosmos. Coin or token staking options at Coinbase are quite limited but there are plans to include more tokens.
Coinbase pays out staking rewards daily for ALGO and ETH, once every three days for Tezos, and once every week for Cosmos.
On Coinbase, you can secure your way to earning 5% staking rewards on tokens with a minimum opening balance of $1 in crypto.
Also, some specific coins have specifics in terms of rewards. Coinbase is offering the same percentage (5%) rewards for Tezos.
SEE ALSO: Staking On Coinbase? 5 Key Things You Should Know
SEE ALSO: How to Stake Ethereum on Coinbase
Key Takeaways
• Coinbase pays out staking rewards daily for ALGO and ETH, once every three days for Tezos, and once every week for Cosmos.
• Coinbase payouts for staking rewards depend on several factors, such as the type of cryptocurrency staked and the payout frequency of that cryptocurrency in particular.
• Coinbase remains the foremost exchange for staking cryptocurrencies and earning magnificent staking rewards, thanks to its simplified protocol and state-of-the-art security.
Recently, we witnessed the emergence of a new mechanism known as Proof of Stake, which has grown in popularity to the point that even ETH is moving towards it.
Who is Eligible to Stake on Coinbase?
Staking on Coinbase is not available to everyone, firstly, your identity must be verified with a valid TIN.
Secondly, Staking is available to certain regions, you may need to visit its support center to know more about your eligibility for staking.
Below is a snapshot of regions where staking is available.
How Does Crypto Staking Work?
On Coinbase, staking is reserved for its customers following the proof of stake consensus mechanism. To stake, you’ll need to run a required node on your hardware and synchronize it with the blockchain network.
Next is to fund your wallet with a minimum staking threshold to kick start the staking process.
To stake crypto, you keep a set number of coins in your wallet and receive staking incentives, which are similar to mining payouts; this process is referred to as staking. There should be some crypto in your wallet, plus your wallet has to be accessible online.
Note that your staked token cannot be withdrawn during the staking duration.
Proof of Stake has grown in popularity as a result of the scarcity and high cost of ASIC miners, which are frequently out of stock.
GPU miners have shown a resemblance to this in terms of purchasing a lot of used ones in the market, but the downside to this is that the payment is quite high, thereby slowing down the return on investment.
Because of these facts, investors concluded it wasn’t a good idea to invest so much money on machines and instead just purchase coins and stake them, which has far fewer risks.
How Often Does Coinbase Payout Staking Rewards?
Users should be aware that cryptocurrencies differ when it comes to Coinbase paying out staking rewards.
For instance, Coinbase pays out staking rewards daily for Algo and ETH, once every three days for Tezos, and once every week for Cosmos.
As a result, you must determine when you will receive your payouts based on the cryptocurrency you chose, their reward frequency, and when you first began staking.
SEE ALSO: How To Join The Waitlist For Ethereum Staking On Coinbase
SEE ALSO: Quick Steps To Stake Tezos On Coinbase
What are Staking Pools?
Not every investor can afford to buy the minimum number of coins required to stake a coin. If you want to stake Ethereum, you will need 32 ETH, On the other hand, for staking on DASH, you will need 1000 DASH.
So you see, all these things make it challenging for the average investor to begin staking. A way around this, however, is to use proof of stake coins with low fees, which do not require much commitment from you, and this is where staking pools come into play.
Individuals who are part of this staking pool often tend to act as one by pooling their funds together, becoming a single stakeholder in the process, allowing them to pay less while still participating.
Instead of one person putting in 32 ETH, 32 people put in 1 ETH each, for a total of 320 people putting in 0.1 ETH.
You may join with any amount of crypto you have, and the minimum requirements are generally pretty low.
This means that users would need to deposit their funds at Coinbase and earn interest on them while they are there.
Similar to savings account in a bank, you both earn crypto, and the price of crypto rises as well.
This is why many users show a high preference towards staking, in contrast to fiat interests. It is one of the sure-fire ways of earning passive income in the cryptocurrency space.
Which Cryptocurrency can be staked on Coinbase?
At the moment, Coinbase does not have many options in terms of cryptocurrencies made available for staking.
When it comes to staking, Coinbase only supports Algorand, Cosmos, Tezos, and Ethereum for now.
There is hope, however, that in the future, more cryptocurrencies will come onboard and will be made available for staking and staking pools.
Are There Risks Involved While Staking on Coinbase?
Other than network issues that occur once in a while as a result of ETH being new on the market, there are no other major risks involved while staking is carried out on Coinbase.
As such, Coinbase is known for its high-security standards, especially when it comes to staking, and, as such, has always protected its users from any perceived risk.
Final Thoughts
Coinbase has established itself as one of the best crypto exchanges out there when it comes to staking.
It has proven this by offering amazing staking rewards for its users depending on the frequency and type of crypto they choose to stake.
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