Cryptocurrency exchange Coinbase has enabled staking benefits for Solana (SOL), enabling holders on the platform to earn SOL rewards just for holding the coin and keeping it staked within the network.
Coinbase announced the move today, noting that it will gradually roll the feature out across its entire user base. The firm will provide an estimated 3.85% annual percentage yield (APY) on SOL that is staked in the Solana network, with rewards distributed every three to four days. By comparison, Coinbase currently offers its users 3.675% APY on Ethereum staking. Yield rates, however, are subject to change and are largely dependent on fluctuations in the total amount of tokens locked up through staking on each given network.
Solana staking has long been available through other means, such as rival exchanges like Binance and FTX, as well as self-custody wallets like Phantom. Coinbase takes a 25% cut of the staking reward provided by the Solana network and then distributes the remaining amount to participating users.
Coinbase will allow users to withdraw their staked SOL funds at any point with no lock-up period, and they must hold at least $1 worth of SOL to be eligible for staking rewards.
Staking is a process in which cryptocurrency holders can lock up their coins or tokens in a blockchain network for a period of time in exchange for yield rewards, which are akin to interest. This mechanism enables the network’s validators to operate, secure the network, and process transactions.
Validators, or node operators, can stake their own coins, while other network users can delegate their own stake to a validator in exchange for a cut of the rewards. Solana and other proof-of-stake networks, such as Polkadot (DOT) and Cardano (ADA), offer such rewards.
Coinbase currently offers staking rewards for six crypto assets: Ethereum 2.0 (ETH), Cardano, Tezos (XTZ), Polkadot, Cosmos (ATOM), and Solana. Users staking coins in Ethereum 2.0—the proof-of-stake network that Ethereum will transition to—must currently lock up their funds indefinitely in Coinbase ahead of the upcoming Merge upgrade.
Solana is currently down about 3% today at a price below $35, as of this writing. It’s similarly down about 3% over the past week, and down 22% over the past 30 days, per CoinGecko.
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