Ethereum, for one, has been one of the top 10 performing cryptocurrencies out there. Hence, it is a no-brainer that investors are willing and ready to engage in Ethereum staking, especially on one of the best and most popular crypto exchanges, which is Coinbase.
• With the expected release of ETH 2.0, investors should be expecting to see an increase in rewards and the value of their interests as Ethereum plans to upgrade to this very soon.
• Coinbase is one of the best platforms out there to stake Ethereum, hence the reason why it has millions of investors, taking a large piece of the cryptocurrency market share.
Ethereum staking is a fundamental part of Ethereum’s transition to proof-of-stake. Today, contingent upon the kind of transaction you want to undertake, it will cost you somewhere in the range of $10-$100 to transact on Ethereum.
Because of its current proof-of-work consensus model, Ethereum can only handle 15 transactions per second. Right now, the interest rates that can be gotten from transacting on the network are around 7.5%.
You’ll need 32 Ethereum tokens to have your validator node. Notwithstanding, Coinbase makes it easy for anyone to stake their Ethereum tokens, with no minimum amount required.
SEE ALSO: How Often Does Coinbase Pay Staking Rewards
SEE ALSO: How to Earn Crypto on Coinbase While Learning
SEE ALSO: Quick Steps To Stake Tezos On Coinbase
Below are the steps to take if you want to stake Ethereum on Coinbase:
Step 1: Create a Coinbase Account
If you are a first-time user, you can set up a Coinbase account using the mobile app or web version.
Keep in mind that doing this is pretty simple, as all you need to have at hand are your name, email address, and location, after which you create a very strong password that would be difficult to predict by hackers.
After you must have done this, you will need to satisfy all tax conditions next by supplying all relevant documents, such as your social security number, date of birth, and driver’s license.
Once all these have been approved, you can now go on to purchase cryptocurrency on the Coinbase platform.
SEE ALSO: What Cryptos Can Be Staked On Coinbase
Step 2: Get your hands on Ethereum tokens
When you buy Ether tokens on Coinbase, you are one step closer to staking Ethereum. Hence, Coinbase allows you and many others to buy these tokens directly, thereby providing you with an easier way to stake Ethereum.
Ether tokens may be purchased in the same manner as equities are: as a market order or a limit order.
Market orders will buy Ether tokens at market pricing, but limit orders will only buy Ether tokens if they reach a certain price that you set when placing your limit order.
Step 3: Get in Line
There is a clause attached, though, when it comes to staking Ethereum on Coinbase. Due to the platform’s high popularity and a huge number of users, users who wish to stake Ethereum on the platform would have to wait in a queue.
Fortunately for you, the time duration for waiting in the queue is different for different users, and as such, if you are among the earliest set of users requesting to stake Ethereum, it wouldn’t be long before you stake your Ethereum and soon after begin to earn interest on it.
Step 4: Stake your Ethereum tokens.
You can stake your Ethereum tokens thanks to the validator nodes being run by Coinbase.
All you need to do is “stake”, and the platform will take it from there.
After you have established a staked Ethereum portfolio on ETH 2.0, just sit back, relax, and watch your staked Ethereum earn interest.
Pros and Cons of Staking Ethereum
Before choosing whether to stake your Ethereum tokens, you ought to think about your objectives as an investor.
Cryptocurrencies are very volatile virtual assets you could decide to put resources into. Consequently, if you choose to stake Ethereum, you need to be resilient.
Staking Ethereum permits you to acquire interest on your underlying speculation. This interest, which is relied upon to run somewhere in the range of 4% and 8% every year, is paid in Ether tokens.
This is great and you believe that Ethereum’s worth will increase since if this happens, your interest will rise in value too.
The main risk of staking your Ether tokens is connected to Ethereum’s volatility.
If the value of Ethereum tokens falls, you will not be able to sell them since Eth 2.0 has not yet been delivered.
Ethereum staking is for investors that see investing in Ethereum as long-term.
SEE ALSO: Borrow Cash On Coinbase With Bitcoin – All the Facts
Staking Rewards on Coinbase
Coinbase has a lot of exciting rewards, which are all the more reasons investors should join the platform.
One such reward is the Coinbase staking reward, as they offer 7% yearly for users who choose to stake their Ethereum token on the platform.
This rate, however, is dependent on the number of Ethereum staked on ETH 2.0. Hence, this 7% interest is likely to decline until the launch of ETH 2.0.
Once it is launched, Validators will earn rewards for transactions that are done on the blockchain.
Already, you stand to earn 25% more if you stake your Ethereum on Coinbase than if you had done it independently.
If you have an interest in your crypto becoming a validated node, you would need to have 32 Ether tokens which wallets such as Argent can readily provide you with.
If getting or owning 32 Ethereum tokens is too much for you, you can still stake with any amount of Ether on Coinbase.
Nevertheless, once your coins are staked, you can’t take them out until Ethereum upgrades to ETH 2.0.
The dispatch date has not yet been set, but the Ethereum organization is striving to get the redesign out at the earliest opportunity.
As per Ethereum Foundation engineers, ETH 2.0 will no doubt be dispatched in March 2022, yet it may show up sometime, relying upon the soundness of the Ethereum 2.0 Testnet.
Since December 2020, people, in general, have approached this testnet. A huge number of nodes have staked over 5% of Ethereum’s complete stockpile on the testnet since its dispatch.
This is the place where you will stake your Ether, and when ETH 2.0 is delivered, the Testnet will turn into Ethereum’s mainnet.
Token staking is a strategy for approving transactions on a proof-of-stake blockchain.
While Bitcoin and Ethereum currently utilize proof-of-work to approve transactions using cryptocurrency miners, the strategy is wasteful, power-consuming, and lacks certain dynamics.
By staking your Ethereum tokens on ETH 2.0, you are directly supporting the Ethereum ecosystem upgrade.
This improvement will extraordinarily increase the convenience of Ethereum’s organization by making exchanges fundamentally less expensive and quicker.
Staking Ethereum is a breathtaking procedure to increase your profit from speculating if the value of Ethereum stays constant or rises.
Rather than simply possessing the resource, you might acquire an Ethereum-based interest to get more cryptocurrencies.
Since Ethereum’s movements aren’t quite on the predictable side, a fundamental thing you would notice as a result of this is that your investments may no longer be liquid.
Also, you need to be aware that you will not be able to sell your investment until ETH 2.0 arrives, which might take up to a year.
Frequently Asked Questions (FAQ)
Is it worthwhile to stake Ethereum?
Yes, it is, since the staking process deserves to be given attention. Staking will make the network more scalable than it is now. Simultaneously, the staking procedure will let users secure their income.
What exactly is Ethereum staking?
Ethereum staking is the process of locking up a sum of ETH for a certain length of time to contribute to the blockchain’s security and collect network rewards.
Investors looking to stake cryptocurrencies should pay close attention to Ethereum, as it will offer them juicy rewards for doing so.
Also, Coinbase is an excellent platform to use when you plan to stake, as the platform is user-friendly, has a nice layout, and offers a wide variety of options for investors. One that would leave you happy after having given it a try.
Start today to stake your Ethereum on Coinbase and rest assured that you will be glad you did.
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