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.
How does staking work?
- When the minimum balance is met, a node deposits that amount of cryptocurrency into the network as a stake (similar to a security deposit)
- The size of a stake is directly proportional to the chances of that node being chosen to forge the next block
- If the node successfully creates a block, the validator receives a reward, similar to how a miner is rewarded in proof-of-work chains
- Validators lose part of their stake if they double-sign or attempt to attack the network
How does staking with Coinbase work?
As long as you’re eligible and hold the minimum balance of a stakeable crypto, Coinbase can stake for you (no work necessary on your end).
- You retain full ownership of your crypto, but you’re delegating your staking power to Coinbase
- Coinbase provides secure staking, so your funds aren’t at risk of being slashed
- For some assets with lockups at the protocol level, we may withhold a small amount of your stakeable crypto to assure that all Coinbase customers have liquidity and can withdraw their crypto as needed
- We take a commission on all rewards received, and the return rate for our customers reflects this commission and the actual amount of your crypto that was staked. You can find our current commission in Section 5.4 of our User Agreement
What countries are eligible for staking?
- The Netherlands
- The UK
- The US*
*excluding New York and Hawaii residents
What are the eligibility requirements for staking?
- You must have your identity verified
- You must have the minimum balance needed for that specific cryptocurrency. You can either purchase or maintain the minimum balance on Coinbase, or transfer that cryptocurrency from an outside wallet or exchange. For help on sending crypto to Coinbase, please visit our help page
- You must hold the eligible cryptocurrency on Coinbase.com (staking is not available on Coinbase Pro)
How do I delegate my staking power to Coinbase?
You must be opted in to staking for that crypto (we automatically opt you in if you’re eligible). To view our Terms and Conditions for staking on Coinbase, please view our User Agreement.
Can I opt out?
Yes, but you will no longer receive Staking rewards until you opt back in.
To opt out of Staking rewards:
- On web: Go to Settings and select Financial Services. From there, you can toggle the Staking Rewards icon off to opt out
- On mobile: Go to Settings on the iOS or Android app and select Financial Services. From there, you can toggle the Staking Rewards icon off to opt out
Can I trade or send funds while they are being staked?
While some protocols impose limitations for moving funds, such as lockup periods for withdrawals, you will typically be able to withdraw your staked cryptocurrency as you would any other cryptocurrency on Coinbase, subject to factors including but not limited to your account history, transaction history, and banking history.
In rare circumstances, trades and withdrawals may be delayed while we wait for staked funds to be unlocked. When this happens, any limits or delays will be communicated clearly in the app.
How do rewards work?
Rewards are calculated by the network. Coinbase receives the rewards from the network on your behalf and then automatically credits them to your crypto wallet.
- They are calculated based on the amount of the cryptocurrency you hold in that particular wallet—the more you hold, the more Coinbase can stake on your behalf, and the more potential rewards you receive
- Rewards are also impacted by the frequency of blocks produced by that cryptocurrency’s network
Will the reward rate always be a fixed percent? Or is there a possibility of an increase?
The reward rate is dependent on multiple factors, primarily determined by the network’s protocol—it’s also influenced by things like baker performance, amounts staked / stakers, etc. There is the potential for the rate to move up or down, dependent on these factors.
Why would estimated rewards differ from actual payout?
The amount shown under Rewards pending is our estimate of the rewards that you could potentially earn when rewards are distributed by the network. Our estimation is based on Coinbase’s prior staking performance for that cryptocurrency.
Is receiving Staking rewards a taxable event for customers?
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.
Where do I find my history of Staking Reward deposits for accounting purposes?
Each reward will populate as a line item in your transaction history report. To download your transaction history, visit our reports page.
Are rewards guaranteed?
Coinbase does not guarantee that you will receive Staking rewards, any specific
reward, or any staking return over time.
What is Annual Percentage Yield and how is it calculated?
Annual Percentage Yield (APY) means a percentage rate reflecting the total amount of staking rewards projected to be earned over an annual period, based on the then-current Rewards Rate compounding at set intervals for a 365-day period.
The APY is a projection based on the rewards we have historically received (“Rewards Rate”) from the applicable staking protocol. This rate is set by the applicable staking protocol, and is neither controlled nor influenced by Coinbase and will change (and thus the APY will change). Each network sets their underlying rewards rate (applicable to all stakers equally) depending on a variety of factors. The APY may be adjusted to account for funds we hold back from staking as part of our liquidity reserve (see above), if applicable. We take a commission on all rewards received, and the APY for our customers reflects this commission. You can find our current commission in Section 5.4 of our User Agreement. Current APYs can always be found displayed in your asset wallet in the app.
Eligible cryptocurrencies for staking
|Cryptocurrency||Minimum Balance Needed||Rewards Payout Rate|
|Cosmos (ATOM)||1 ATOM||7 days|
|Tezos (XTZ)||1 XTZ||3 days|
How to start staking Cosmos (ATOM)
Beginning on September 30, 2020, eligible customers will have the opportunity to stake ATOM on Coinbase. If you're eligible for ATOM staking, you'll automatically be opted in. and the bullet points below can help you turn staking on and off:
On web: Go to Settings and select Financial Services. From there, you can toggle the Staking Rewards icon on to opt in or out
On mobile: Go to Settings on the iOS or Android app and select Financial Services. From there, you can toggle the Staking Rewards icon on to opt in or out
To be prepared to start, be sure to have at least 1 ATOM in your wallet (the minimum balance needed)
Please note that only individual accounts are eligible for staking, not business accounts.
When are Cosmos rewards credited?
Cosmos rewards will be credited to your wallet and will show up as a recent transaction
When you first begin staking, the first rewards payment is credited after approximately 7-14 days
Every payment after that is credited approximately every 7 days
If you remove your funds early or you drop below the minimum balance, you may not receive rewards
How to start staking XTZ
Beginning on November 6, 2019, eligible customers will have the opportunity to stake on Coinbase
- On web: Go to Settings and select Financial Services. From there, you can toggle the Staking Rewards icon on to opt in
- On mobile: Go to Settings on the iOS or Android app and select Financial Services. From there, you can toggle the Staking Rewards icon on to opt in
- To be prepared to start, be sure to have at least 1 XTZ in your wallet (the minimum balance needed)
When are Tezos rewards credited?
Tezos rewards will be credited to your wallet and will show up as a recent transaction.
- When you first begin staking, the first rewards payment is credited after approximately 35-40 days
- Every payment after that is credited approximately every 3 days
- If you remove your funds early or you drop below the minimum balance, you may not receive rewards
To learn about how staking XTZ on Coinbase works, please feel free to check out our Coinbase Earn: Staking Tezos video.