The Truth - Staking Ethereum on Coinbase!

Do you regret staking your Ethereum on Coinbase? Well, I do too, but here’s some important information you need to know if you're staked or plan on staking Ethereum on Coinbase.

When withdrawals?

Coinbase says you will be able to withdraw staked Ethereum when Phase 1.5 of the Ethereum network upgrade is completed.

Here’s the bad news, we’re currently waiting on the Phase 1 upgrade and from a recent update, they’ve stated that the date for the Phase one is now September 19th, but their could possibly be more delays. Delays could be viewed as a positive because they are spending more time finalizing code.

Now like Coinbase mentioned, you can ONLY withdraw when upgrade 1.5 is completed, so now it’s looking like withdrawals will be enabled in early 2023 for Coinbase users depending on if the Phase 1 upgrade is successful.

So, if you plan on staking you’re Ethereum on Coinbase please understand that this is a long term interest earning play and the rewards you accrue aren't accessible.

Progress

If you would like to see how much progress has been made on the Ethereum upgrade you can go to the staking rewards link here: https://www.stakingrewards.com/earn/ethereum-2-0/ as you can see, there is a percentage chart that gives a visual display of how close we are to the upgrade.

One benefit to you staking on Coinbase is you can’t touch it!

If you are similar to me and you believe in the future of Ethereum, then it’s great not having to check the price every second and think about if I had my Ethereum I could sell at the current price or spend it on an NFT.

Now, I understand that in the beginning some people were too excited when Coinbase released Ethereum staking and they didn’t read the terms before they clicked stake. Don’t worry, I did the same.

Unfortunately, we can’t do anything right now but wait, so just relax and don't look at prices on the Coinbase app until withdrawals are enabled.

If you want some entertainment go to the ETH2 reviews on the Coinbase app and read the comments and comment Mason Capital sent you!

Penalties:

Many people may have overlooked this, but it’s a real risk to users that staked their Ethereum.

Slashing: A penalty by the network on the validator for incorrectly validating a transaction or being offline.

Staking Ethereum could potentially lead to a loss in your staked Ethereum if slashing occurs.

One important note is, if you staked your Ethereum on Coinbase prior to August 30th, 2021. Coinbase will replace any Ethereum lost to slashing at no additional cost.

Basically, if you staked your Ethereum after August 30th, you are at risk of losing your staked Ethereum if slashing occurs.

Now, Coinbase is a public company that invests in technology and software to reduce the risk of your staked Ethereum being lost, but anything can happen in crypto. Just be aware of this risk before deciding to stake Ethereum on Coinbase.

Is it possible to trade ETH2 before the upgrade?

Coinbase has stated in the past that it may offer trading to be able to exchange or sell your staked Ethereum before the Phase 1.5 upgrade.

Now, this isn’t guaranteed so don’t have your hopes up, but I'm glad they're thinking about offering this option. This would be great for users that are angry with the lockup period and impatient with Coinbase.

Rewards

Currently the interest rate is 3.25% on Coinbase and continues to decrease, although we may see an increase once the Merge is completed. This is due to block rewards being given to stakers instead of Miners that are using GPU's. This is because PoW or Proof of work is going to be removed and changed to PoS or Proof of stake.

If you ran your own validator it’s currently 4.09% which isn't that much of a difference however, it's important to note how important decentralization is to the Ethereum blockchain.

Now, Coinbase does take a 25% commission which is the highest out of all service providers, but the process to stake is extremely easy to do. To be honest, it's nice not having to worry about the validator, that's why they deserve the 25%.

Just 4 taps and you’re staking!

Now rewards earned from staking will also be unlocked when Phase 1.5 is complete so all your Ethereum will be available to trade at once.

Final thoughts:

Staking is big business and exchanges want your Ethereum. As we’ve seen recently with all the exchanges that have went bankrupt. It only makes sense to use the giants such as Coinbase, FTX, or Binance or even better use DeFi.

I encourage you to learn how to store your digital assets yourself and possibly run your own validator. If you are storing you're assets yourself I suggest a hardware wallet, specifically a Ledger Nano S.

I hope this post helped you out and gave you more clarity on the whole upgrade. I know it’s frustrating not being able to have access to your crypto, but like I said earlier there is nothing we can do but wait.

If you aren't using the Ethereum Layer 2 Arbitrum, I encourage you do to so. It's extremely cheap to complete transactions and has many great applications such as GMX!

Disclaimer: Mason Capital is an independent publisher, not an investment advisor, financial advisor, loan broker, insurance producer, or insurance broker. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. Mason Capital does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. We encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Featured estimates are based on past market performance, and past performance is not a guarantee of future performance.