Coinbase to support ETH 2.0 rewards as beacon chain goes live ๐จ This article is 4 years old...
Coinbase to support ETH 2.0 rewards as beacon chain goes live
2 min read
Updated: Dec. 1, 2020 at 11:31 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Crypto exchange Coinbase rolled out support for the upcoming ETH 2.0 upgrade, as per an announcement on Monday. Users can then stake their coins at the exchange and reap rewards without the need to run their own nodes.
The move comes as Ethereum 2.0โs โbeacon chainโ launches today, Dec. 1, marking the first phase of a multi-year move to a proof of stake protocol. The latter is a shift away from Ethereumโs current proof of work design, and would see faster transactions, lower fees, better scalability, and improved rewards for all stakeholders of the network.
On December 1, the Ethereum Beacon Chain will launch, beginning a multi-year upgrade to Ethereum 2.0 (ETH2). Coinbase intends to fully support ETH2 through staking and trading.
Read more here: https://t.co/e1fsAohT4j
— Coinbase (@coinbase) November 30, 2020
Coinbase said customers will be able to convert ETH in their Coinbase accounts to ETH 2.0 and earn staking rewards. However, while all staked ETH 2.0 tokens would remain locked on the beacon chain, Coinbase will enable trading between ETH2, ETH, and all other supported currencies providing liquidity for our customers.
โWeโll be launching the above features to customers in eligible jurisdictions starting in early 2021. Weโll communicate more details closer to the launch of each feature,โ noted Coinbase.
A dual-asset frenzy
Crypto researcher โHasuโ noted out the introduction of Coinbaseโs staking rewards would create a dual-asset system where the original ETH would be locked up to maintain the network and a derivative representing that lock up would be available to use for trading and investments.
Here we go. Coinbase doing exactly what I predicted:
* Users can mint BETH by staking ETH via Coinbase
* they can trade BETH against ETH and other coins on Coinbase
* get staking rewards AND liquidity at the same timeThis is very attractive. Other exchanges will follow. https://t.co/K3BbxQF5kS
— Hasu (@hasufl) November 30, 2020
However, Ethereum founder Vitalik Buterin pointed out that such derivative instruments would be specific to various service providers (such as individual exchanges, wallets, or staking services).
โThere won’t be two assets. There will be N+1 assets: ETH (on the eth1 chain or self-staked), and N third-party staking derivatives from all the different providers,โ said Buterin.
There won't be two assets. There will be N+1 assets:
* ETH (on the eth1 chain or self-staked)
* N third-party staking derivatives from all the different providers— vitalik.eth (@VitalikButerin) December 1, 2020
Ethereum nodes surge
The Ethereum network has grown multifold in the past week in terms of total nodes, even eclipsing those of Bitcoin.
As reported by CryptoSlate yesterday, over 11,000 Ethereum nodes are now run by validators around the world, compared to Bitcoinโs 10,981. A sharp surge in the formerโs nodes occurred last month itself, as interest in the network grew significantly.
The fast growth of the Ethereum network has now catapulted it to the biggest blockchain network, even though it was created over six years after Bitcoin. This can be attributed to the wide number of applications, instances, and products run on Ethereum compared to Bitcoin, which has seen less usage as a tech network and more as a digital asset.
Ethereum trades at $603 at press time and is down -1% since Monday.
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Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Vitalik Buterin stands as the pioneering force behind Ethereum, a transformative community-driven platform that fuels the cryptocurrency ether (ETH) and underpins a myriad of decentralized applications.