Coinbase’s waitlist for Ethereum 2.0 staking is live.
Per a press release shared with CoinDesk, Coinbase customers can now sign up to stake their ETH into the Beacon Chain smart contract, the coordinator and bridge between the old Ethereum and Ethereum 2.0, the network’s momentous migration to a proof-of-stake network.
This upgrade will do away with proof-of-work mining in favor of staking. Typically, you need 32 ETH to run a validator node for Ethereum’s new blockchain, but Coinbase will allow their users to stake any amount of ETH in their account.
Rhea Kaw, a senior product manager for Coinbase’s retail team, told CoinDesk that Coinbase users could earn up to 7.5% APR on their staked ETH, depending on the Ethereum network’s variable rate of return.
In exchange for the service, Coinbase “take[s] a commission on all rewards received, and the return rate for our customers reflects this commission,” Kaw said. Per Coinbase’s User Agreement, this staking commission is 25% of the rewards received.
Besides Coinbase, Kraken exchange also stakes ETH on behalf of their customers and is actively depositing ETH into Ethereum 2.0’s Beacon Chain contract. Popular web and software wallet MyEtherWallet supports in-app Eth 2.0 staking as well.
The “Beacon Chain” – the backbone of Ethereum’s new design – went live in December and so did Ethereum 2.0’s deposit contract. To claim a stake in the new network, Ethereans can deposit legacy ETH into this contract to convert it to ETH2 (aka Beacon Chain ETH, or BETH).
Once ether is deposited into the Beacon Chain, it cannot be withdrawn directly – however, using an exchange will be one way of getting around this restriction. Kaw told CoinDesk that “initially, [Coinbase] customers will not be able to sell or send the portion of [ether] that they choose to stake. However, Coinbase is exploring avenues by which to give customers a way to trade their staked ETH very soon.”
“All [ether] will ultimately automatically migrate to ETH2 once the network has been fully updated,” Kaw concluded.
There is currently $5.5 billion worth of ether locked in the Beacon Chain deposit contract.