Over the past few years, staking has become immensely popular amongst investors and asset owners in the cryptocurrency space. After all, no one can deny how enticing it is to be able to lock in some funds on a blockchain while earning rewards in the process.
Unsurprisingly, Coinbase – one of the world’s most reliable cryptocurrency exchanges – allows people to stake their crypto assets and earn lucrative profits. In this article, we’ll be discussing how to stake on Coinbase, the coins that can be staked on the platform, and the rewards each coin offers.
How to Stake on Coinbase?
Not all cryptocurrencies on Coinbase’s exchange can be staked. Bitcoin, for example, doesn’t allow staking. To view all the coins available for staking on Coinbase, visit the ‘Earn’ tab.
If you are planning to stake Ethereum (ETH) – which is now possible due to the recent Ethereum Merge – it is important to note that it is only available in North America, South America, Europe, the Middle East, Asia, and Africa.
1. Create a Coinbase account
If you don’t already have a Coinbase account, the first thing you will need to do is open one, preferably via the Coinbase mobile app. It is a straightforward process, only requiring entering your name, email, and location.
2. Complete KYC verification
After creating your Coinbase account, you will be asked to verify your identity – primarily for tax purposes. Depending on your registered location, you will need to submit certain documents for the verification process. These documents may include your driver’s license, the last four digits of your Social Security number, and your date of birth.
3. Buy PoS cryptocurrency to stake
Before you can stake, you will need to acquire a proof-of-stake (PoS) token. These tokens can be purchased directly on Coinbase. As with stocks, you can buy ETH and other PoS tokens either as a market or a limit order.
A market order allows you to purchase any cryptocurrency at the current market value, while a limit order will only buy the crypto when it reaches a specific price, which you must have set when placing your limit order.
4. Stake your tokens
After purchasing a stakeabale token, you can visit the ‘Earn’ tab and select the token you wish to stake. Once staked, your account will be automatically deposited with the staking rewards.
What Coins Can You Stake on Coinbase?
Here are all the available cryptocurrencies that can be staked on Coinbase with their APY, minimum requirement amounts, and reward payouts.
|Cryptocurrency||Annual Percentage Yield (APY)||Minimum Amount Required||Staking Reward Payouts|
|Ethereum (ETH)||3.28%||No minimum||Daily|
|Cardano (ADA)||2.60%||<$1||5 Days|
|Cosmos (ATOM)||5.00%||0.0001 ATOM||Weekly|
|Algorand (ALGO)||5.75%||0.01 ALGO||Quarterly|
|Tezos (XTZ)||4.63%||0.001 XTZ||3 Days|
Having highlighted the coins available for staking on Coinbase and their percentage yield, it is worth noting that the exchange charges a 25% commission on all staked coins; this will be taken off your staking rewards.
The first coin on this list is the Ether token, which has an Annual Percentage Yield (APY) of 3.28%. Staking this coin became possible after Ethereum was upgraded from the Proof-of-Work (PoW) mechanism to the Proof-of-Stake (PoS) mechanism. On Coinbase, you can stake any amount of this coin, and you will be eligible to receive daily rewards in the form of interest, though the first rewards payout will only be credited after about two weeks.
Next up is the ADA token, which is one of the top ten most valuable cryptocurrencies by market cap. Cardano runs on the PoS mechanism; it is, in fact, famed for being a next-gen evolution of Ethereum – with an APY of 2.60%. To stake Cardano, you need at least $1 worth of ADA in your Coinbase account.
On Coinbase, you will begin to earn rewards on your staked ADA tokens every 5 – 7 days after an initial holding period of 20 – 25 days. The best part is that you will always be in control of your Cardano, and you can decide to stop staking at any time.
Another coin available for staking on Coinbase is Solana, which has an APY of 4.00%. To stake Solana on Coinbase’s exchange, you need a minimum balance of $1 worth of SOL, albeit you can always choose to opt-out with your token still intact.
Although its timeline mostly depends on the number of staking participants, the first reward on staking Solana is paid approximately after 5 – 7 days. Subsequent rewards payments are made within 3-to-4-day intervals.
ATOM is another crypto asset that you can stake on Coinbase. To get started, you will need to deposit or purchase a minimum of 0.0001 ATOM on your Coinbase account.
ATOM token has an APY of 5% on Coinbase. And you will receive your first rewards payout within 7 to 14 days after staking Cosmos on the exchange. Subsequent payments will be credited about every 7 days.
You can also stake ALGO tokens on Coinbase, albeit you will need a minimum balance of 0.01 ALGO. On the cryptocurrency platform, ALGO has an annual percentage yield of 5.75%.
That said, Algorand blockchain recently changed its staking rewards model, allowing ALGO stakers to receive staking rewards every 3 months rather than every day.
To round up this list of coins to stake on Coinbase, we have the XTZ token with an APY of 4.63%. You only need 0.0001 XTZ to stake on the Tezos network. Although the payment of the first reward might take approximately 35 to 40 days, subsequent payouts will require a shorter period (approximately every 3 days).
Other Cryptocurrency Exchanges and Their Reward Rates
Just like Coinbase, there are several other cryptocurrency exchanges that allow people to stake their funds and earn staking rewards.
Here’s what other staking platforms and the reward rates each have to offer.
Will I be able to trade my tokens while they are earning rewards?
Typically, you can cash out your staked crypto – as you would any other asset. However, cash-outs can be affected by different factors, which may include your account history, transaction history, and bank history. Also, trades may sometimes suffer a delay while the locked-in token is being unlocked.
Is the reward rate a fixed value?
No, the reward rate is not fixed. It can change depending on various factors determined by the network’s protocol.
What is Annual Percentage Yield (APY)
Annual Percentage Yield simply refers to a percentage ratio indicating the amount of compound interest expected to be earned over one year.
Staking your preferred token on Coinbase is mostly a straightforward process, and it can be done in a matter of minutes. That said, it is crucial that you pay attention to the staking options you have on Coinbase’s exchange. Luckily, the information in this piece should help you get started.