Coinbase Cloud, the cloud-based service provider of Coinbase, has announced a new partnership with Kiln, a platform that enables users to stake Ethereum (ETH) without running their own nodes. The integration will allow Coinbase Cloud customers to stake any amount of ETH below the 32 ETH threshold required for solo staking on Ethereum 2.0.
Staking is the process of locking up a certain amount of cryptocurrency in order to participate in the network’s consensus mechanism and earn rewards. Staking on Ethereum 2.0 is expected to provide higher returns and lower risks than traditional mining, as well as contribute to the network’s security and scalability.
Validators are randomly selected to propose and attest to blocks, and they receive rewards for their service. However, they also face penalties if they act maliciously or go offline. Staking on Ethereum 2.0 requires a minimum of 32 ETH per validator, and it involves some technical knowledge and responsibility.
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However, staking on Ethereum 2.0 also comes with some challenges, such as the need to run a dedicated node that is online and synced at all times, the risk of losing funds due to slashing or downtime penalties, and the high entry barrier of 32 ETH (currently worth over $100,000).
Kiln aims to solve these challenges by offering a user-friendly and secure platform that allows anyone to stake ETH with just a few clicks. Kiln leverages the power of decentralized cloud computing to run validator nodes on behalf of its users, ensuring high uptime and performance. Kiln also provides a dashboard that lets users monitor their staking performance, rewards, and fees.
By integrating Kiln into its cloud service, Coinbase Cloud enables its customers to access the benefits of staking ETH without having to deal with the technical complexities or the high capital requirements. Coinbase Cloud customers can simply connect their Coinbase account to Kiln and choose how much ETH they want to stake. They can then sit back and watch their ETH earn passive income while supporting the transition to Ethereum 2.0.
Coinbase Cloud is one of the first cloud service providers to offer native ETH staking below 32 ETH, giving its customers a competitive edge in the rapidly growing Ethereum ecosystem. Coinbase Cloud and Kiln share a vision of making Ethereum more accessible and inclusive for everyone, and this partnership is a major step towards achieving that goal.
ETH staking is a way of participating in the Ethereum network and securing its transactions. By staking ETH, you are locking up your funds in a smart contract and validating blocks of transactions. In return, you receive rewards in the form of new ETH. The more ETH you stake, the more rewards you earn.
However, staking ETH on your own requires a minimum of 32 ETH, and It also requires technical skills, hardware, and constant online availability. If you don’t have enough ETH or don’t want to deal with the hassle of running your own node, you can join a staking pool or use a third-party service provider. But these options come with their own drawbacks, such as fees, trust issues, and reduced control over your funds.
That’s why Coinbase Cloud was created. With Coinbase Cloud, you don’t need to run your own node or join a pool. You simply deposit your ETH to your Coinbase Cloud account and start earning rewards. You can also withdraw your ETH at any time, subject to network conditions.
Coinbase Cloud’s ETH staking is powered by its proprietary technology that ensures security, scalability, and reliability. We use secure hardware modules to store your private keys and sign transactions. We also use multiple nodes across different regions to ensure high availability and performance. And we monitor the network 24/7 to detect and mitigate any issues.
By staking ETH on Coinbase Cloud, you can enjoy the following benefits:
Low entry barrier: You can stake any amount of ETH below 32 ETH and start earning rewards immediately.
High returns: You can earn up to 8% annualized rewards on your staked ETH, depending on the network conditions.
No fees: We don’t charge any fees for staking ETH on Coinbase Cloud. You only pay the network fees when you deposit or withdraw your ETH.
Full control: You can withdraw your ETH at any time, subject to network conditions. You can also track your staking balance and rewards on your dashboard.
Security and trust: You can trust Coinbase Cloud to keep your funds safe and secure. We are a regulated and compliant company with over 10 years of experience in the crypto industry.
Staking ETH on Coinbase Cloud also involves some risks that you should be aware of:
Network risk: The Ethereum network is undergoing a major upgrade to Ethereum 2.0, which will transition from proof-of-work to proof-of-stake. This upgrade may cause delays, disruptions, or changes in the staking process and rewards.
Lock-up risk: When you stake ETH on Coinbase Cloud, you are locking up your funds in a smart contract. This means that you cannot access your funds until the network allows withdrawals, which may take months or years.
Slashing risk: If our nodes fail to validate blocks correctly or behave maliciously, they may be penalized by the network and lose some of their staked ETH. This may affect your staking balance and rewards.