Categories: News

Ethereum 2.0 staking is coming to Coinbase

The U.S. exchange plans to roll out support in early 2021.

U.S. digital currency exchange Coinbase has outlined plans for supporting Ethereum 2.0 staking rewards — possibly setting the stage for even wider adoption of the smart contract platform. 

In an official blog post, Coinbase says it plans to roll out Eth2 staking, trading and conversion services starting in early 2021. Once Eth2 is supported, existing Coinbase customers will be able to convert their Ether (ETH) tokens to ETH2 and earn staking rewards.

The company said:

“While staked ETH2 tokens remain locked on the beacon chain, Coinbase will also enable trading between ETH2, ETH, and all other supported currencies providing liquidity for our customers.”

Coinbase indicated that it will “communicate more details closer to the launch of each feature.”

The news comes on the eve of the highly anticipated Ethereum Beacon Chain launch, which kicks off a multiyear upgrade of the blockchain network. The upgrade will transition Ethereum away from its existing proof-of-work consensus to a proof-of-stake network. Ethereum’s development team claims that proof-of-stake reduces centralization risks and allows for a stronger defense against 51% attacks.

Phase 0 of Eth2 was confirmed last week after Ethereum’s deposit contract met the minimum threshold of 524,288 ETH. At press time, 855,264 ETH had been sent to the 2.0 deposit contract. 

Ethereum holders who choose to stake their coins will not be able to withdraw or transfer their stake until after Phase 1 is rolled out — a process that could take years. Several companies, including Darma Capital, are planning to offer intermediated staking that would allow users to continue accessing their capital.

As the second-largest cryptocurrency by market capitalization, Ethereum is one of the most liquid assets in all of crypto. It currently ranks third by daily volume, according to Messari.io. Coinbase Pro processes one of the largest volumes for the ETH/USD pair.

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