Coinbase, the most popular US platform for buying and selling cryptocurrencies, offers institutional investors in the US the option to bet with Ethereum (ETH).
The move, which Coinbase says provides another crypto onramp for institutions looking to enter the crypto space, will move from the Ethereum network’s Proof of Work (PoW) to Proof of Stake (PoS) protocol.
Last year, Coinbase announced its intention to introduce Ethereum Staking, a practice for institutions to earn rewards for acting as transaction validators on the Ethereum blockchain. At that time, the exchange introduced a waiting list for this product. Selected customers could bet on a portion of their holdings rather than their entire balance and earn rewards if they wanted to.
Coinbase will manage this process for its customers in hopes of making the product more accessible to US institutions. “When a client stakes ETH, the system will use the ticker ETH2 to represent the staked ETH token,” the company said in a press release.
“Note there is no separate/new ‘eth2’ token or asset. The price of ETH and ETH2 is identical. Once the upgrade to the Ethereum network is complete, ticker ETH and ETH2 will be combined into a single ticker ETH. Since the integration is currently scheduled for September 2022, he may no longer use the term ETH2 from now on,” the exchange explained.
Coinbase supports staking of major coins
Coinbase Prime allows institutional investors to stake many other assets for passive income. Staking is also supported by Solana, Polkadot, Cosmos, Tezos, Celo and others.
The US platform has contributed to the growth of the DeFi movement, listing many up-and-coming projects for its users. In early March, Coinbase introduced a Cardano (ADA) staking service. This allows users to earn dividends or interest on their token holdings simply by depositing and holding tokens on the platform.
This process involves sharing profits in exchange for users delegating ownership of their tokens to users running blockchain software.
The decision comes amid great interest from retail investors who are open to the idea of profiting from crypto assets. Major U.S. cryptocurrency exchanges already offer services for Algorand, Cosmos and Tezos holders, so it’s no wonder they stake their rewards.
Meanwhile, Coinbase is not the only staking platform, other large cryptocurrency exchanges are expanding their staking-as-a-service offerings. According to the company, staking will allow users to earn dividends or interest on digital assets for validating transactions, as well as vote on changes to the blockchain.