There are different ways to make money from cryptocurrency. Apart from just buying coins and waiting for them to pump, airdrops, NFTS, and so on, you can make your coins work for you. So many investors are looking for ways to gain additional income from their crypto assets. There are many ways to do this, one of them being through staking. You must have come across the word staking in your crypto journey, which explains why you are reading “How to stake Ethereum on coinbase.”
Staking is simply a way of generating additional income from cryptocurrency. Staking is an act of committing your crypto assets to support a blockchain network. Through staking, investors earn their rewards because they contribute to the overall security of their chosen blockchain.
How to stake Ethereum on coinbase
To get an Ethereum stake and some other cryptocurrencies, you will have to purchase that through decentralized exchanges. To buy the Ethereum stake, you will need to get Ethereum(ETH) before using it to buy the Ethereum stake.
Once that is done, follow the steps below and stake your Ethereum on coinbase.
1. The first step is to download the coinbase wallet
Coinbase wallet is available as a browser extension and as a mobile app. It would be best if you had a coinbase wallet, a self-custody wallet, to purchase an Ethereum stake.
2. Select a suitable coinbase wallet username
When setting up your coinbase wallet, select a suitable username like other wallets. The username will allow other people using coinbase wallet to send crypto to you quickly. After setting up your wallet, you can decide to keep your username private.
3. Save your recovery phrase.
You should have been very familiar with this now. Your 12 words recovery phrase should be exclusive for you alone. Giving it to a third party provides the person with access to your wallet. You can also decide to store your recovery phrase using the cloud backup feature of the coinbase wallet.
4. Set aside your Ethereum fees
You might need to pay some fees for the network. The prices vary based on several factors like how busy the network is, the complication of the transaction, and how fast you want the transaction completed.
5. Transfer the purchased ETH to your coinbase wallet
Once you get a coinbase account, you will be able to buy Ethereum. Then proceed to transfer the Ethereum to your coinbase wallet. The transfer might vary depending on whether you use a mobile app or chrome extension.
6. Buy an Ethereum stake in the trade tab using your ETH
With the coinbase wallet on your mobile phone, you can get the Ethereum stake. You can click on the convert button if you are also using the coinbase wallet. Then search for Ethereum stake and add the amount you want to exchange for Ethereum stake.
Eligibility requirements for staking Ethereum
Is everyone eligible to stake Ethereum? Once you have the following, then you are eligible.
- You will need to have ETH in your coinbase account
- Confirm if your region is eligible for ETH staking
- Verify your identity
- Verify your ID documents
- Get acquainted with the terms and conditions associated with staking Ethereum.
What is the difference between Ethereum(ETH) and Ethereum 2(ETH2) on Coinbase?
You must have read that you will need to buy ETH and convert it to ETH2. ETH2 is simply a staked ETH. Once you stake your ETH, it converts to ETH2 on coinbase. Also, in terms of price, ETH2 is similar to ETH. At the end of each upgrade on the Ethereum network, ETH2 and ETH get merged into one token.
Is Staking profitable?
There is a widespread belief that it is better to have your Ethereum assets work for you than just holding them. Ethereum is an excellent way to have an increased return on investment. Just look out for when Ethereum stays constant and rises, then you can go ahead and stake.
However, although staking Ethereum is profitable, it still has some risks. ETH staking is an experimental process involving some risks and possible failures. One of these risks could be losing your staked assets due to slashing.
Slashing is enforced as a penalty at the protocol level due to validator or network failure.
Therefore, before going ahead to stake, do your research and understand all the related risks.
How much money can you make staking Ethereum?
The reward you will earn for staking Ethereum varies with different exchanges. However, for coinbase, you will get around 7% annually. However, the rate will keep fluctuating until ETH 2.0 launches. However, you can earn more when you stake your Ethereum as an independent node, and to do that; you will need up to 32 Ether tokens.
What is the safest way to stake Ethereum?
The safest way to stake Ethereum is to choose a well-known and validated exchange.
Some of these exchanges include:
-
Coinbase
We have already emphasized the importance of staking your Ethereum on coinbase.
After deducting the 25% commission on staking rewards, Coinbase offers an APY of about 5%. If any losses occur due to validator responsibility not being met, Coinbase covers for it.
Additionally, coinbase makes available the ETH2 token for users that deposited ETH. This ETH2 will serve as proof for the deposited ETH.
However, the major disadvantage of staking on coinbase is that you cannot withdraw your deposited ETH until ETH 2.0 gets launched.
So if you are willing to wait that long for your profit, then go ahead and stake your Ethereum with coinbase. If you aren’t that patient, you can check out other options.
-
Binance
You can also stake your Ethereum on Binance. Unlike coinbase, the APY of Binance is not very clear. They are promoting an APY of 25%, and the calculation will be determined by the staking process and the state of the Ethereum network.
When you deposit ETH on Binance, the exchange will provide you with a BETH token. This BETH token serves as proof of the ETH you deposited. At the end of the ETH 2.0 upgrade, BETH will be converted to ETH. This process can take up to 2 years.
-
Kraken
Kraken is another good exchange for staking your Ethereum. The APY of Kraken is not stable. Kraken offers an APY of 5-7%, which can change as a result of some factors. Some of these factors include the number or amount of staked ETH and the development of the staking protocol. In Kraken, all newly deployed Ethereum stays up to 20 days before it can generate interest.
-
Crypto.com
Crypto.com offers a unique way of staking Ethereum. You can stake in three different ways, which include the flexible term(F), fixed term of 1 month (1M), and fixed term of 3 months (3M). for each of the periods, there is a different APY. Longer fixed terms offer higher APY.
-
Swissborg
Swissborg offers three different types of accounts: standard, community premium, and Genesis premium. Your APY greatly depends on the type of account you are using.
Swissborg uses the smart yield portfolio and offers 2.2-4.4% once you activate your ETH through the smart yield portfolio.
Can you Stake 1 Ethereum?
There is no minimum limit to the amount of Ethereum you can stake on coinbase.
How much Ethereum do you need to stake?
There is no limit to the amount of Ethereum you can stake. You can stake any amount on coinbase and other exchanges. However, if you want to stake your crypto as an independent node, you will need 32 Ether tokens.
Conclusion
The decision to stake your Ethereum should be solely your decision. You need to know the benefits and risks associated with staking crypto. This will make you take key responsibility for whatever outcome you are presented. However, staking your Ethereum is an excellent way to make your crypto assets work for you and generate additional income.