There’s at least one downside to Web3. Cybersquatters have arrived.
Coinbase has added Solana to its list of assets that can be staked on the platform. This announcement was made just as rumors of the crypto exchange becoming insolvent begin to circulate on the web.
Last week, Coinbase temporarily suspended its affiliate program in the U.S., and that’s why rumors are flying.
How Many Cryptocurrencies Can Users Stake on Coinbase?
Solana is not the first digital asset Coinbase users can stake. Coinbase has been offering staking for years. Cryptocurrencies that can be staked on Coinbase include Ethereum, Cardano, Cosmos, Tezos, and Algorand. However, in most cases, stakers can earn more on a particular asset somewhere else.
Coinbase announced its waitlist for ETH 2.0 staking in February 2021. Ethereum 2.0 staking went active on Coinbase in the U.S. in April that year. The crypto exchange rolled out Ethereum 2.0 staking in the UK, Germany, Spain, Belgium, Ireland, and Slovakia in September 2021. Users are now earning 3.25 APR with their ETH 2.0 stake on Coinbase.
Cosmos can be staked at Coinbase with an APR of 5.0 percent.
Tezos will earn stakers an APR of 4.63 percent. The APY for Dai and USDC is .15 percent. The highest interest rate one can earn for staked assets on Coinbase is 5.75 APR, for Algorand.
The yield for Solana staked on Coinbase is 3.85 APY.
Where Are the Highest Staking Yields for Digital Assets?
Coinbase is not the only platform that offers staking. In fact, stakers can earn up to 5.20 percent APY by staking ETH 2.0 on Binance. Celsius was offering up to 7.5 percent APY on ETH 2.0 staking, but the crypto lender has recently filed for bankruptcy.
Atomic Wallet is currently offering up to 10 percent APY on Cosmos staking. Both Binance and Atomic Wallet are offering 6 percent to 7 percent APY for staking Tezos. Binance is offering up to 13.47 percent APY for Solana staking.
While some of these returns seem impressive and enticing, there are dangers to staking your crypto on any platform.
The Risks of Staking Your Digital Assets
Staking crypto on any platform comes with risks. To understand those risks, it helps to understand how staking works.
When a crypto holder stakes a crypto, they lock that cryptocurrency up in an account for a specified period. It can be a short time or it can be a long time. In general, the longer the duration of staking, the higher percentage of potential yield you can earn but the highest the risk associated with staking.
One of the risks of staking is the volatile nature of cryptocurrencies. A cryptocurrency’s value could decrease while you have it locked up in your staking account. For instance, if you stake ETH 2.0 for four months, if the price of ETH drops during those four months, then you’ve lost value. It’s possible to lose money even as you earn a high interest rate on your crypto.
Another risk to staking on a web-based platform or through a mobile app like Crypto.com is that the platform could be hacked or disappear altogether.
It’s important to understand the risks associated with staking crypto before you place your assets on an exchange or in a web-based staking account. Learn the differences between different types of wallets and their associated risks. The best wallets are cold storage wallets kept offline and hardware wallets, but you’re not likely to earn any staking rewards on those wallets. Learn about risk and mitigate your risk by choosing wallets less likely to disappear or get hacked and cryptocurrencies that have long-term staying power.