Coinbase Enables Staking to Offer Rewards for Staking Solana
Coinbase is expanding the coin-staking portfolio for users. The cryptocurrency exchange has enabled Solana staking benefits, which in return will generate rewards for SOL investors. These rewards will be allotted for holding and staking SOL coins within Coinbase's network. The current estimated annual return for Solana staking on Coinbase is 3.85 percent Annual Percentage Yield (APY). The rewards will be distributed every three to four days.
Staking is a process that involves depositing crypto assets to support a blockchain network and validate transactions. Blockchains that support proof-of-stake (PoS) mining allows staking of held coins. Staking allows crypto holders to generate passive income.
Solana is a PoS blockchain. It allows SOL holders to hold their assets and churn returns.
“While it has been possible for individuals to stake Solana on their own, or through a delegated staking service, the process can be confusing and complicated. With today's launch, Coinbase is offering an easy, secure way for any retail user to actively participate in the Solana network and earn rewards,” Coinbase said in a blog post.
To get started, people can buy Solana on the Coinbase app or deposit SOL tokens from external wallets into their Coinbase account, which would start earning them awards automatically.
The Solana network will be setting the underlying return rate depending on the number of staking participants.
Coinbase distributes the return to customers after deducting a 25 percent commission.
“Your Solana always stays in your account; you just earn rewards while keeping your crypto safely on Coinbase. You can opt out any time you want. We take measures to mitigate the risks associated with staking and allow you to unstake anytime,” the company's blog noted.
In light of recent situations Coinbase found itself in, it does not come as a surprise that the company is trying to rope in as many commissions as possible.
The crypto exchange, earlier this month, laid off18 percent of its workforce. This reportedly left over 1,000 people in the crypto sector without jobs.
Explaining its decision, Coinbase CEO Brian Armstrong said that he was responsible for over-hiring that had begun hindering the efficiency of the company.
In addition, the ongoing slump in the crypto market also acted as a factor behind pushing Coinbase to take some effective cost-cutting measures.
Despite registering its name in the Fortune 500 list as the first crypto firm to make it there, Coinbase reported a 44 percent loss in trading values.
In the first quarter of 2021, the crypto exchange said its trading volume generated $309 billion (roughly Rs. 23,86,484 crore). The figure is significantly less than the trading volume of $547 billion (roughly Rs. 42,23,250 crore) that Coinbase reported in the fourth quarter of 2021.
For now, Coinbase has frozen its hiring for the foreseeable future and has also decided to put a full stop to its advanced, trader-centric service called ‘Coinbase Pro' by the end of this year.