Ethereum 2.0 Staking

What is Ethereum 2? 

Ethereum 2 (ETH2) is an upgrade to the Ethereum network that aims to improve the network’s security and scalability. This upgrade involves a shift in Ethereum’s mining model (“Proof-of-Work”) to a staking model (“Proof-of-Stake”). 

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 on Coinbase. The price of ETH2 is identical to ETH. Once the upgrade to the Ethereum network is complete, both ETH and ETH2 will merge into one token.

What is staking?

Staking is the process of actively participating in transaction validation (similar to mining) on a Proof-of-Stake blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn staking rewards. Learn about how staking works on Coinbase. 

What are the rewards associated with staking ETH?

You may earn yield on any ETH that you stake as a reward for helping secure the network. ETH staking rewards are given in accordance to how much ETH is validated and what rewards the network is offering over a time period. When there is very little ETH staked, the protocol rewards will be larger as an incentive for more ETH to come online. As an increasing amount of ETH is staked, the reward is reduced. View the current amount of ETH staked.

Are there risks associated with staking ETH? 

ETH staking is offered under the terms and conditions of our 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 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 you started staking prior to August 30, 2021, Coinbase will replace any ETH lost to slashing at no additional cost. If you started staking your ETH after August 30, 2021, some conditions apply—please refer to the terms you accepted at initial staking or see the User Agreement for details.

Is there a staking minimum and maximum?

There are no minimums to stake on Coinbase. There is a maximum amount of ETH that each user 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: 

• Hold ETH in your Coinbase account.

• Live in a jurisdiction eligible for ETH staking.

• Complete identity verification.

• Complete ID document verification.

• Read and understand the terms and conditions associated with ETH staking.

Important: Only individual accounts are eligible for staking—not business 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 requirements above), you may be able to convert your ETH to ETH2 and start staking. 

If you’re experiencing issues with staking on the Coinbase mobile app, please make sure you’re using the latest version.

Will I be able to use my funds while I’m staking ETH?

For now, you won't be able to trade, send, or sell the amount you have staked. When the ETH2 upgrade is complete and withdrawals are enabled by the Ethereum network, you’ll be able to send or sell your staked ETH along with all of the rewards you’ve earned.

Where can I view my staked ETH?

Your staked ETH will appear in your ETH2 wallet. This is because your ETH becomes ETH2 when you decide to stake. Please note that staked ETH (ETH2) cannot currently be traded or sent off platform.

Where can I view my staking rewards? 

ETH2 staking rewards will be reflected in your account under Lifetime Rewards and will be updated on a regular basis. At this time, staking rewards won't be added to your overall staking balance and you won't be able to access them. 

What are the tax implications of staking ETH?

It's the user’s responsibility to determine what taxes, if any, arise from participating in the ETH staking service. US customers who earn at least $600 in income from Coinbase may 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 can't currently stake your funds directly from a vault. You’ll need to move your funds from your vault into your ETH wallet in order to stake.