Coinbase has announced staking rewards with ETH2 for its UK-based customers, with a waiting list for the launched product ahead of its roll out in the near future.
ETH2 is the upgraded version of Ethereum and its staking allows customers to earn up to 5%* APR per year by converting their ETH, the second most popular cryptocurrency, into ETH2 and staking their assets on Coinbase.
Post-conversion, assets are then added to the staking pool which generates rewards in return, with Coinbase performing staking on the customer’s behalf.
Marcus Hughes, General Manager of UK and EMEA, said: “We have witnessed a huge rise in customers purchasing Ether in recent months and so are delighted to be in a position to offer them staking rewards for this asset.
“We believe that, in simplifying staking, which is very complex to do individually, we can play a role in widening access to this key part of the cryptoeconomy. In the current climate, a return of 5% is incredibly competitive and, given the success of our existing staking rewards programmes we expect ETH2 staking to be highly popular amongst our UK users.”
This is not the first time Coinbase offers staking rewards. This has happened before with Tezos and Cosmos in 2019, but launching ETH2 staking rewards in the UK aims to address “unprecedented demand” from that market.
With Coinbase, staking requires no minimum amounts and customers can convert, stake, and earn rewards on a portion of Ethereum rather than their entire balance.
Staking ETH outside of Coinbase is possible but requires a stake of at least 32 ETH (approximately $100,000 as of 31 August) as well as the technical know-how needed to run the ETH2 client software. Coinbase brings value to smaller or less skilled ETH holders.
The cryptocurrency exchange has recently announced its second-quarter results showing a huge jump in its profits and revenue during this period when compared to last year.
The company raked in a profit of $1.6 billion in the second quarter of 2021 as compared to $32 million when compared to the same period last year.
Likewise, its revenue also jumped to $2 billion when compared to $178 million last year. On the face of it, these are very good results for the company which went public only last year and it shows that crypto trading is here to stay.
But this also points to volatility in the crypto market which is likely to determine the revenues and the profits that the company would be making in each quarter.
The first half of the year did see a lot of volatility in the crypto markets as the BTC prices made record highs and this was then followed by a big crash and all this volatility would certainly have helped to boost the revenue and the profits of the exchange and not only Coinbase, every other exchange is likely to have made the most of all the trading volume that accompanied the volatility.
The total trading volume at Coinbase grew by 38% with the institutional trading volume growing by 47% and the retail trading volume growing by 21% a typical response when because the prices were dropping for much of this period. At such times, the institutions continue to try and accumulate and the retailers try and bail out of it as much as they can.
The company’s outlook for the next quarter is that it expects lower revenue and lower growth in the quarter. It didn’t give any specific reasons for the same but it would be because it expects the prices to remain stable during this period which means that the interest for trading from the users is likely to be low. It is also likely to face some strong competition from other exchanges in the US like FTX and others.