In line with an official announcement, Coinbase users are now able to stake their Ethereum [ETH, 0.74%] into the Beacon Chain smart contract, the coordinator and bridge between the old Ethereum & Ethereum 2.0, the network’s momentous migration to a PoS network.
This upgrade will do away with PoW mining in favor of staking. Typicelly, around 32 ETH are required to run a validator node for Ethereum’s new blockchain, but Coinbase will permit their users to stake any amount of ETH into their account.
Rhea Kaw, a senior product manager for Coinbase’s retail team, revealed that Coinbase users could earn up to 7.5% APR on their staked ETH, counting on the Ethereum network’s variable rate of return.
Additionally using the new service, Coinbase “take[s] a commission on all rewards received, and therefore the return rate for our users reflects this commission,” Kaw said. Per Coinbase’s User Agreement, this staking commission is 25% of the rewards received.
Moreover to the upcoming Ethereum staking option, Coinbase users can also stake Algorand [ALGO, -9.98%], Cosmos [ATOM, -7.22%] and Tezos [XTZ, -3.38%] tokens.
Besides Coinbase, Kraken exchange also stakes ETH on behalf of their users and is actively depositing ETH into Ethereum 2.0’s Beacon Chain contract. Renowned web and software wallet MyEtherWallet too supports in-app Eth 2.0 staking.
The “Beacon Chain” – the backbone of Ethereum’s new design – was launched earlier in the month of December & then so did Ethereum 2.0’s deposit contract. To stay stake within the new network, Ethereans can deposit legacy ETH into this contract to convert it to ETH2.
Once Ethereum is deposited into the Beacon Chain, it can’t be withdrawn directly – however, using an exchange might be a method of getting around this restriction. Kaw explained that “primaily, [Coinbase] users won’t be able to transfer or sell the portion of [ether] that they prefer to stake. However, Coinbase is exploring avenues by which to offer users how to trade their staked ETH very soon.” While explaining further, Kaw concluded:
“Ethereum will ultimately automatically migrate to ETH2 once the network has been fully updated.”
There is presently $5.5 Bln worth of Ethereum locked within the Beacon Chain deposit contract.