Staking with Coinbase is safe. To date, no customer has lost any staked crypto by staking with Coinbase. However, there are few risks you should understand before staking.
1. Unstaking takes time
The balance you stake will be unavailable to sell or send until you unstake it. You can ask us to unstake at any time, but the process can take from a few hours to a few weeks, depending on the asset. Most staking assets have unstaking periods predetermined by the protocol (more information here). The time to unstake Ethereum depends on network conditions and is not guaranteed to complete in any specific amount of time.
Because crypto can be highly volatile, there is a risk that the market price could be significantly higher or lower by the time the unstaking process is complete.
2. Protocol penalties (or “slashing”)
To ensure stakers do their job well, some protocols impose penalties (“slashing”) for validators that violate protocol rules. In the event of a slashing incident, Coinbase may or may not replace your assets, depending on the cause of the slashing.
Slashing is exceptionally rare. According to a study published in February, 2023, only .04% of ETH validators have ever been slashed. Coinbase retail stakers have never been slashed on any protocol. And if Coinbase (or any of its third-party validators) were to make a mistake that resulted in slashing, we have committed in our User Agreement to reimburse these penalties. This means that Coinbase would automatically transfer its own crypto to your account to replace the amount that was lost. You would not need to do anything to receive this reimbursement.
However, there are a few situations in which Coinbase would not replace slashing losses. For example, if slashing was the result of a hack, your own actions, or a bug in the protocol itself, we would not reimburse those losses. Events like these are extremely unlikely–Coinbase has never experienced a loss of this kind on any staking protocol. But they are not impossible, so you should understand the risks before staking your assets. See the User Agreement for the complete terms of when Coinbase will reimburse staking losses.
Staking involves a risk of protocol penalties. Although Coinbase will replace assets lost to penalties in some situations, it is possible you could lose some or all of the crypto you have chosen to stake.
3. No guarantee of rewards
Staking rewards come from the underlying crypto network, not Coinbase. Because protocol rules and network conditions can change, past rewards do not necessarily predict future staking payouts. Moreover, downtime for Coinbase’s hardware, software, or the network itself could result in lost rewards. Coinbase does not guarantee that you will earn any reward, and you have no right to a reward unless it is received by Coinbase.
Staking rewards received from the network will be credited to your account at regular intervals, minus our transparent fee disclosed here. This fee is subject to change. Coinbase does not have any discretion in the calculation or payment of rewards.
Staking rewards are not guaranteed. It is possible that the rewards you will earn will be higher or lower than those estimated based on past network behavior, including that you will earn no reward at all.