What is Coinbase Staking?

If you’re in crypto, most likely you’ve heard of Coinbase.

With over 100 million customers, Coinbase is the largest crypto exchange in the U.S. and the world’s largest Bitcoin custodian. The company serves as a gateway to buying and selling cryptocurrency, as well as to earning passive crypto rewards through staking.

If you’re considering investing in crypto through Coinbase, make sure you stake your assets to maximize returns.

In this guide, we detail the following:

• What is Coinbase
• How crypto staking works on the exchange
• What to consider when staking on Coinbase
• Coinbase vs. Robinhood staking

…and much more.

Let’s get into it.

What is Coinbase?

Coinbase is a leading crypto exchange where you can buy, sell, and store Bitcoin, Ethereum, Solana, and many more. It serves as a digital asset platform for both beginners and experienced traders. 

Here’s a shortlist of Coinbase’s products and features:

• Coinbase Advanced: more advanced trading tools for experienced traders.
• The Base App (formerly Coinbase Wallet): a social finance app where you can post, trade, earn, and chat with friends.
• Coinbase One: a monthly subscription service that unlocks special features like zero commission trading, boosted staking rewards, and enhanced customer service.
• Crypto Staking: staking services across a wide range of networks.
• Coinbase Card: A Visa-powered debit card that turns your purchases into crypto rewards.

With all its crypto features, it’s no wonder Coinbase has become such a valuable company.

How Staking Works on Coinbase

Like many large crypto exchanges, Coinbase operates its own validator. You’ll commonly find Coinbase at the top of Delegated-Proof-of-Stake validator lists.

By operating its own validator, Coinbase can leverage customers’ crypto assets, such as Solana and Cosmos, and charge them a commission. 

Here’s how you can stake through the desktop browser:

1. Sign in to your account.
2. Click My assets, then choose a crypto to stake.
3. Press Stake more.
4. Enter the amount of crypto to stake
5. Review the details and press Confirm.

Coinbase staking is a straightforward process that anyone can follow. This simplicity has allowed them to capture significant assets and become a top validator.

Key Considerations When Staking on Coinbase

While Coinbase staking is easy, there are risks and considerations that you should be aware of.

High Commission Rates

Coinbase charges a 35% fee on staking rewards. This fee is extremely high compared to natively staking through a browser wallet.

For Solana staking, you can use Solflare and pay 0% commission fees depending on the chosen validator.

Regional Availability

While Coinbase staking is generally available in most countries, some regions restrict staking and may limit which assets can be staked.

According to Coinbase’s support page, residents of California, Maryland, New Jersey, and Washington cannot stake due to regulations.

Custodial Risk

Coinbase takes custody of your crypto assets on your behalf. This type of staking is called 

‘Custodial staking’ or poses custodial risk.

Custodial risk means that should Coinbase encounter financial difficulty, you may be unable to retrieve your crypto assets. This risk applies similarly if Coinbase were hacked and lost the staked assets.

However, as Coinbase is a large, publicly listed company, the likelihood of it going down is lower.

Validator Centralization

As we mentioned earlier, Coinbase is a top validator across several networks. By staking through Coinbase, you contribute to centralizing the crypto network.  

As an alternative, you can use staking optimization platforms like Polli.co, which recommend which validators to delegate to. The platform uses a proprietary scoring criterion that considers low commission fees and validator decentralization, among other factors.

Coinbase vs Robinhood Staking

Coinbase has established itself as a leading crypto exchange. However, as the industry grows, new players seek to capture market share. Robinhood is one such competitor.

Initially a disruptor in the traditional investing space, Robinhood offers crypto trading and, more recently, crypto staking for assets like Ethereum and Solana.

From a pure crypto investor’s perspective, Coinbase still leads the way.

If you’re trading and holding assets on the platform, you might as well use it for staking too. However, if you’re aiming to get into more traditional investing options like stocks and retirement funds, dive into Robinhood.

Final Thoughts on Coinbase Staking

Coinbase is the go-to platform for crypto investors. If you aren’t interested in taking custody of your crypto assets, trading, holding, or staking crypto on Coinbase is an excellent choice.

Coinbase is highly regulated and has an excellent reputation. You should be able to use the platform with ease.

As crypto continues to grow worldwide, it will be interesting to see how Coinbase attracts more participants.

FAQs

Is Staking on Coinbase Worth It?

Yes. Staking on Coinbase is worth your time, especially if you’re already holding assets on the exchange. Might as well generate yield on your assets. However, make sure you’re aware of the risks of holding assets on a centralized platform.

How Much Does Coinbase Take for Staking?

Coinbase takes a 35% commission on staking rewards. This rate is higher than Robinhood (25%) and native staking (0% to 5%).

How to Get $200 Free From Coinbase?

You can get up to $200 from Coinbase by taking advantage of a sign-up bonus offered to new users who sign up through a referral link and “spin a wheel.”

If the offer is not available, check the site for more recent offers.

The content of solostakers.com is for informational purposes only and should not be considered financial advice. It represents the personal views and opinions of the author(s) and is not endorsed by any financial institution or regulatory body. Cryptocurrency and staking investments carry inherent risks and readers should conduct their own research and consult with a financial professional before making any investment decisions. The owner and author(s) of solostakers.com will not be liable for any losses, damages, or consequences arising from the use of the information on this site. By accessing solostakers.com, you agree to bear full responsibility for your investment decisions.