Ethereum 2.0 Staking
What is Ethereum 2?
Ethereum 2.0 (ETH2) is an upgrade to the Ethereum network that aims to improve the network’s security and scalability. This upgrade involves Ethereum shifting their current mining model to a staking model.
What’s the difference between Ethereum (ETH) and Ethereum 2 (ETH2) on Coinbase?
ETH2 = staked ETH. Coinbase offers our customers the ability to stake their ETH to earn rewards. When you stake your ETH, it converts to ETH2. The price of ETH2 is identical to ETH. Once the upgrade to the Ethereum network is complete, your ETH2 will revert to ETH.
What is staking?
Staking is the process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn Staking rewards. For more information on how staking works on Coinbase, please see this help page.
What are the rewards of staking ETH?
You may earn up to 5% APR on any ETH that you stake as a reward for helping secure the network. ETH2 staking rewards are given in accordance to how much ETH is validating and what rewards the network is offering over a time period. When there is very little ETH staked, the protocol rewards increase as an incentive for more ETH to come online. On the other hand, when there’s already a lot of ETH staked, the reward is reduced. View the current amount of ETH staked.
Are there risks staking ETH?
ETH staking service is available under the User Agreement and any additional terms that may be presented at the time you choose to stake. ETH staking is experimental and involves some risks including possible failure of the network. Please ensure you independently assess, understand, and accept the related risks before deciding to stake.
An important risk to be aware of is the possibility of losing your staked assets (also known as your "principal funds'') due to slashing. Slashing is a penalty enforced at the protocol level associated with a network or validator failure.
Coinbase has taken measures to minimize the risk of slashing. However, slashing can be caused by events outside of our control that could lead to the loss of staked ETH. If a slashing event occurs, Coinbase will replace your slashed principal promptly at no extra cost. If you started staking after August 30, 2021, Coinbase will only cover slashing penalties to the extent they are a result of an action or omission within our reasonable control.
Is there a staking minimum and maximum?
There are no minimums to stake on Coinbase. There is a maximum amount of ETH that each customer can stake to help manage network limits. This maximum amount will change over time and is not specific to your individual account.
What are the eligibility requirements to stake ETH?
To be eligible to stake ETH, you must:
1. Hold ETH in your Coinbase account.
2. Live in an eligible country for ETH staking.
3. Complete identity verification.
4. Complete ID document verification.
5. Read and understand the terms and conditions associated with ETH staking.
Important: Only individual accounts are eligible for staking—not businesses accounts.
Which regions are eligible for ETH staking?
How do I start staking ETH on Coinbase?
Go to the Ethereum asset page under your Portfolio on web or mobile and follow the respective prompts. If you're signed in and eligible (see eligibility above), you may be able to convert your ETH to ETH2 and start staking immediately.
If you’re on the waitlist, you'll need to wait to be removed from it before you can start staking ETH. We’re working to make this feature available to more customers and we’ll notify you when you’re off the waitlist.
Note: Coinbase Support cannot verify if you’re on the waitlist, your place in line, or when you will be given access to the feature.
If you’re experiencing issues with staking, please make sure you’re using the latest version of the Coinbase mobile app.
Will I be able to use my funds while I’m staking ETH?
During the initial launch, you will be unable to trade, send, or sell the amount you have staked. Later this year, we expect to enable liquidity of your staked ETH funds.
Where can I view my staked ETH?
Your staked ETH will appear in your ETH2 wallet. This is because Coinbase converts your ETH to ETH2 when you decide to stake. Please note that ETH2 tokens are specific to Coinbase and cannot be traded or sent off platform.
Will ETH staking rewards automatically be added to my staking balance?
At this time, staking rewards will not be added to your staking balance and you will not be able to access them. ETH2 staking rewards will be reflected in your account under Lifetime Rewards and will be updated on a regular basis.
What are the tax implications of staking ETH?
US customers who are subject to US tax reporting are required to report their earnings from Staking rewards. US customers that earn over $600 in Staking rewards will receive a 1099-MISC from Coinbase. You can learn more about the 1099-MISC on the official website of the IRS.
Can I stake funds stored in a Coinbase vault?
You currently can not stake your funds directly from a vault. You’ll need to move your funds from your vault into your ETH wallet in order to convert and stake.
Can I be removed from the waitlist?
By joining the ETH staking waitlist, you're simply letting us know that you are interested in ETH staking. You're not committing to staking ETH and it will not be staked automatically—your funds will not be staked without your expressed permission.
If you’re no longer interested in staking ETH then there is no obligation to do so when you become eligible to stake. Please note that Coinbase Support can not manually remove you from the waitlist.