Table of Contents
- What Is Coinbase’s Earn Service?
- How Does Coinbase Earn Work?
- Rewards and Supported Cryptocurrencies
- Getting Started with Coinbase
- Locating the Coinbase Earn Section
- Who can Participate in Staking on Coinbase?
- Drawbacks of Staking
- Investor Takeaway
Coinbase is the largest US-based cryptocurrency exchange in terms of daily trading volume. It offers an easy-to-use staking-as-a-service program called Earn that lets you stake your crypto and earn rewards.
With excellent liquidity, reliability, and security, Earn is a great place to start earning staking rewards if you are a beginner or HODLer.
In this guide, we will take a deep dive into Coinbase Earn, and explain its features, advantages, disadvantages, eligibility requirements, earning potential, and risks involved.
At a Glance
Rewards rate: Up to 10% APY*, with boosted rewards for Coinbase One subscribers.
Eligible assets: Ethereum (ETH), Cosmos (ATOM), Solana (SOL), Polkadot (DOT), Polygon (POL),Tezos (XTZ), Cardano (ADA), Coinbase Wrapped Ethereum (cbETH)
Minimum deposit & balance: As little as $1 of crypto.
Pros:
- Secure and and easy way for long term holders to earn staking rewards
- No technical knowledge needed to participate
- Get started with small amounts
- Potential to earn up to 10% APY
- Coinbase is the only publicly listed exchange in the U.S.
- Staked assets never leave your account and are not loaned out
- According to the company, customers have never lost crypto while staking
Cons:
- Staked assets take time to unstake (varies from a few days to a few weeks, depending on the asset)
- Currently available with a limited number of tokens
- Coinbase charges a commission on rewards to stake through their service
- Service availability varies by country and state
What is Coinbase Earn?
Staking verifies on-chain blockchain transactions using a Proof-of-Stake (PoS) algorithm: Ethereum, Solana, Cardano, and others. In exchange for helping to secure the network by “staking” (or locking up) their crypto, stakers are rewarded with a share of the network’s transaction fees.
Typically, staking requires technical knowledge and a hefty chunk of change. For example, on the Ethereum network, individual stakers need a minimum of 32 ETH to run a validator.
Coinbase makes staking more accessible by batching together staked assets from many users and handling the technical work for you.
Their Earn on Coinbase service makes staking accessible to everyone. It operates under a staking-as-a-service (StaaS) model, where you can stake your funds with just a few clicks. You don’t have to worry about technical details and computer hardware, or commit vast sums of money.
How Does Coinbase Earn Work?
Coinbase pools funds from many account holders, then handles all the technical aspects of securing and managing the validator nodes required to stake and secure the network.
Since assets are pooled together, customers can stake as much, or as little, as they want, starting at just $1 worth of crypto: much more affordable than 32 ETH! Coinbase charges a small commission (see Staking Services here) on rewards received from the network in exchange for their services.
Rewards and Supported Cryptocurrencies
By staking, you are “locking up” your crypto. In other words, staked assets cannot be sold or sent until they are unstaked, which may take a few minutes or several weeks, depending on the asset.
Users can request to unstake at any time, and Coinbase displays the estimated unstaking time when you stake your assets.
Getting Started with Coinbase Earn
Set Up Your Coinbase Account
The first step to getting started with Earn on Coinbase is to create your Coinbase account:
- Visit the Coinbase website at https://www.coinbase.com.
- Click Sign Up
- Select either Individual or Business for your account type
- Enter the following details accurately:
- Your full name (as it appears on your ID)
- An active email address
- A secure password for your account
- Take some time to read the User Agreement and Privacy Policy
- Click on Create free account when you are ready
- Coinbase will send a verification email to your provided email account – open the mail and click the verify button
- You will be prompted to enter a phone number for verification
- Enter the mobile number and click on Send Code
- Coinbase will send a seven-digit code to your mobile – enter the code on the Coinbase page and click Submit
- You will now be asked to provide additional personal information, including the following:
- Your name, date of birth, and gender
- Address
- ID number
- Purpose of using Coinbase
- Source of funds
- Current employment status
- Click on Continue to finish the registration process whenever you are ready
Your Coinbase account is now active. The next step involves uploading copies of your ID documents and selfies for Know Your Customer (KYC) verification. This is a mandatory step. Log into your account and head to your Profile page to complete KYC.
Enable 2FA Authentication
After successful ID verification, we strongly recommend enabling 2-factor authentication (2FA) for an additional layer of security to your Coinbase account. 2FA can help reduce the risk of unauthorized access to your account and funds.
Once enabled, 2FA will trigger whenever anyone:
- tries to sign into your account using an unknown device or phone number
- tries to send crypto out from your Coinbase account
To enable these actions, the system will require a unique verification code which only you can access. Coinbase provides four different types of 2FA verification with varying levels of security and convenience:
- Physical security key
- Google Authenticator
- Coinbase security prompt
- SMS/Text
Set Up Coinbase Earn
After creating your Coinbase account, setting up 2FA, and linking your credit cards/wallets/other payment methods, the next step is to enable staking. When you are signed in, you can access the Earn web page by going to https://www.coinbase.com/earn/, or if you are using the app, you can find the Earn tab (%) on the bottom navigation bar. You can also stake eligible assets directly from an eligible asset wallet by following the directions to stake on the wallet screen.
Who Can Participate in Staking on Coinbase?
Crypto staking using Earn is available in most jurisdictions, but the shifting regulatory landscape means that availability might change daily. Coinbase recommends checking your account to get accurate information on availability in your region. However, local laws regarding the use of cryptocurrency can vary widely. You can find up-to-date information regarding your eligibility on your Coinbase account. For the latest information on eligibility status, visit the official Coinbase support page.
You must own an eligible asset or token in your Coinbase account to earn staking rewards. To fund your Earn on Coinbase account:
- Transfer some eligible tokens from your Coinbase Wallet to your Coinbase account, or
- Use your linked credit card to buy some eligible tokens directly from Coinbase on your My Assets page.
Apart from one-time purchases, you also have the option to set up and automate recurring purchases of your preferred staking tokens on a fixed schedule and budget. (See our piece on Dollar-Cost Averaging.)
Drawbacks of Staking
The most significant drawback is the unstaking period, which varies from a few minutes to a few weeks, depending on the asset. Coinbase displays the estimated withdrawal time when you stake your assets. Be aware, in case immediate access to your crypto is important.
Proof-of-stake blockchains also encourage validator quality by imposing reward penalties in case of network or validator failure. According to Coinbase, they take stringent measures to reduce these risks, and no customer has lost crypto due to staking with Coinbase. Coinbase is committed to compliance with the networks’ rules in which it is staked.
Investor Takeaway
With its user-friendly interface, in-depth performance data, and wide range of supported assets, Coinbase is an excellent platform for crypto newcomers and long-term holders interested in staking rewards. The Earn program allows you to start staking with just $1 in crypto assets, without needing advanced knowledge of blockchain networks.
One popular strategy for crypto beginners is to buy assets in small amounts, ideally using the automated recurring purchases option for long-term results.
And if you are already HODLing established tokens like ETH, SOL, or ADA for the long term, it makes sense to put those assets to work in staking, letting your crypto work for you.
* Disclaimer: All crypto staking reward rates are subject to change. The APY you receive depends on the rewards received from the network, which can change over time. Coinbase takes a commission on all rewards received, and the APY for our customers reflects this commission. Customers will be able to see the latest rate directly within their accounts. Auto-enrollment in staking is available only in eligible jurisdictions and for eligible networks. Staking on some networks may require affirmative opt-in. Your ability to trade, send, sell or otherwise use your staked assets may be limited and subject to network unbonding periods.
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