What is Coinbase?
Coinbase is one of the most popular online crypto exchange platforms for buying, selling, transferring, and storing cryptocurrency. What’s less known about them is that they also operate a staking service for Ethereum where users can stake ETH stored on the exchange with them and earn staking rewards.
Ethereum staking with Coinbase – cbETH
To stake Ethereum with Coinbase, you’ll need to meet the following pre-requisites:
- Identity verfied with Coinbase
- Live in a jurisdiction eligible for staking Ethereum
When you stake ETH with Coinbase, you will receive an ERC-20 token called Coinbase Wrapped Staked ETH (cbETH), which is a liquid representation of your staked ETH held with Coinbase plus any accrued staking rewards; the staking provider and token issuer is Coinbase.
cbETH follows Compound Finance’s cToken model, where tokens can be minted or burned base on a floating conversion rate. As the underlying staked ETH continues to earn staking rewards, each cbETH token will continue to represent a growing share of staked ETH.
The number of cbETH received upon wrapping is based on the ETH to cbETH conversion rate at the point of wrapping.
At any time, you can unwrap cbETH back into ETH at any time, to receive ETH with any accrued staking rewards. However, there is a processing time associated with unstaking ETH on Coinbase, both on the protocol level (~2 days depending on the withdrawal queue) and Coinbase application level (up to 48 hours).
You can also move your cbETH tokens to a self-custodied wallet and trade them off the Coinbase platform as with any other ERC-20 token.
Why stake with Coinbase?
Coinbase is one of the most reknown institutions with a staking service that’s well-established since 2019, with Ethereum staking starting in 2021.
Coinbase runs multiple Ethereum clients and node operators, reducing the risk of a bug that could result in a heavily correlated slashing event. This diversification also extends towards geographical diversification across multiple hosting environments in multiple regions.
Here are some other facts about staking Ethereum with Coinbase:
- There are no minimums to stake
- There is a maximum of 10,000 for staking ETH
- There are no fees for wrapping staked ETH
- The number of cbETH units you receive upon wrapping is based on the ETH to cbETH conversion rate
- The conversion rate will change over time due to rewards earned on the underlying staked ETH
- The price of cbETH reflects the price of the underlying staked ETH plus any accrued rewards
- The price of cbETH and staked ETH will likely differ because they trade on a wide range of crypto exchanges and their market prices can deviate
- The market may value cbETH less than the underlying staked ETH
How to stake ETH on Coinbase mobile app
- Select Ethereum on the ‘Asset’ tab.
- Select Ethereum ‘Primary balance’
- Select the ‘Stake your ETH’ infographic
4. Review the disclaimer for staking ETH. Select ‘I understand’ to continue.
5. Select the amount of ETH you would like to stake either in fiat or the native token amount. You can interchange between the two by selecting the button highlighted in red.
6. Select ‘Preview stake’
7. Select the ‘stake now’ button.
How to stake ETH on Coinbase web
1. Select the ‘Assets’ tab in the sidebar
2. Select ‘Ethereum’
3. Scroll to the ‘Stake now’ infographic and select ‘Stake now’
4. Review the disclaimer for staking ETH. Select ‘I understand’ to continue.
5. Select the amount of ETH you would like to stake either in fiat or the native token amount. You can interchange between the two by selecting the button highlighted in red.
6. Select ‘continue’.
7. Preview the amount you would like to stake then select ‘Stake now’.