Coinbase Supports Solana (SOL) Staking With Higher Yield Than Ethereum

Coinbase Supports Solana (SOL) Staking With Higher Yield Than Ethereum

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2022-07-04 00:03:44

Coinbase users can now earn passive returns as high as 3.85% by locking SOL in the Solana network through a Coinbase account.

Coinbase officially supports SOL staking from June 30 for eligible accounts

Starting today (June 30), the Coinbase exchange has enabled staking (staking) for Solana (SOL), allowing holders on the platform to earn SOL. Coinbase says it will gradually roll out the feature across its entire user base. Estimated annual percentage yield 3.85%. This is the next move after Coinbase integrated the Solana blockchain into its self-custodial wallet.

For comparison, Coinbase now offers users 3.675% APY when staking Ethereum. However, the rate of return is variable and largely depends on the volatility of the total number of tokens locked through staking on each given network.

Solana staking has long been available through other means, such as rival Coinbase exchanges like Binance and FTX, self-custodial wallets like Phantom. Thus, what differentiates Coinbase is to cut 25% of the staking rewards offered by the Solana network and then distribute the remaining funds to participating users.

Coinbase will allow users to withdraw their SOL deposits at any time with no lock-up period and they must hold at least SOL worth 1 USD to qualify for a staking bonus.

Frequency of receiving rewards will be from 3-4 days / 1 time. To staking Solana, Coinbase users must also make sure to complete identity verification on the platform. This feature will be rolled out gradually to all Coinbase users.

Staking is an activity that allows users to lock their coins or tokens on a blockchain network for a period of time in exchange for a profit reward, similar to interest. This mechanism enables the network’s validators to function, secure the network, and process transactions.

Validators, or node moderators, can stake their own coins, while other network users can entrust their stakes to validators in exchange for a cut reward. Solana and Proof-of-Stake (PoS: proof of stake) networks, such as Polkadot (DOT) and Cardano (ADA), offer such rewards.

As such, Coinbase currently offers staking rewards for six crypto assets: Ethereum 2.0 (ETH), Cardano, Tezos (XTZ), Polkadot, Cosmos (ATOM) and Solana.

Users who put their coins in Ethereum 2.0 – the PoS network that Ethereum will migrate to – must now lock their funds indefinitely in Coinbase before performing the next The Merge upgrade.

At the time of writing, Solana is currently down about 7% at 10:00 a.m. today at just under $35. For the week, down about 3.6% and down 30% in the last 30 days, according to CoinGecko.

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