Cryptocurrency News

Coinbase Will Support Staking for Ethereum 2.0

By December 4, 2020 No Comments

Key highlights:

  • The Phase 0 of Ethereum 2.0 was launched on December 1
  • Leading crypto exchanges like Coinbase have already announced support for Ethereum 2.0 staking
  • Ethereum 2.0 will bring a transition from Proof-of-Work to Proof-of-Stake

Ethereum 2.0 is one of the hottest topics in the crypto world these days. Changing the consensus mechanism from Proof-of-Work to Proof-of-Stake will likely turn out to be a smart move for the Ethereum project, as it will greatly increase its scalability and also reduce its ecological footprint. The first step of Ethereum 2.0 was made on December 1 when the beacon chain for Ethereum 2.0 was officially launched.

Coinbase and other leading crypto exchanges will support Ethereum 2.0 staking

Coinbase is the biggest crypto exchange in the United States, and it has announced that it will be supporting Ethereum 2.0 staking. With the support from Coinbase, Ethereum 2.0 will get a nice boost towards mass adoption. 

Coinbase affirmed its program in a blog post, and the exchange will support staking for ETH2 starting with early 2021. The Coinbase service is not limited to just staking, and customers can trade and convert ETH to ETH2. Ethereum is the largest Altcoin by market capitalization, and its markets enjoy high liquidity. Coinbase Pro is one of the biggest liquidity providers for the ETH/USD pair. Coinbase will release more details after launching the new features. 

It’s not just Coinbase that will be supporting Ethereum 2.0 staking –  other exchanges like Binance and Huobi have announced support as well. The strong support for Ethereum 2.0 by leading cryptocurrency exchanges indicates that the crypto community expects a bullish future for Ethereum. 

Ethereum 2.0 will bring massive improvements to performance and security

The Ethereum 2.0 upgrade is of critical importance for the Ethereum project, and it will take a multi-year process before all the features are implemented and the transition from Proof-of-Work to Proof of Stake is fully completed. Ethereum developers believe the transition will decrease centralization, and help Ethereum become more resistant against attacks.  

The beacon chain was cleared for launch after stakers placed a total of 524288 ETH into the Ethereum 2.0 deposit contract. However, ETH holders who participate in the staking won’t be able to withdraw their coins and staking profits until phase 1.5 is released. This process may take some years. In the meantime, companies are helping users here by offering intermediated staking, which will effectively permit them to still access their coins.

The Phase 0 of Ethereum 2.0 went live on Tuesday, and it was a significant milestone for the project. According to the Ethereum Foundation, holders of Ethereum don’t need to do anything regarding the transition. The foundation explains the change doesn+t do much from the user`s viewpoint at the moment. The next step for Ethereum 2.0 will be in 2021, and it`l be a solution for the scalability issues of the Ethereum blockchain. 

The ETH community can participate in staking, and they can also participate in testing each upgrade. Savvy users who find bugs in proposed upgrades can receive bug bounties as a reward for their endeavors.