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US digital currency exchange Coinbase outlined plans to support Ethereum 2.0 staking rewards, likely setting the stage for even wider adoption of the smart contract platform.
In an official blog post, Coinbase says it plans to launch Eth2’s staking, trading and conversion services starting early 2021. Once Eth2 is supported, existing Coinbase customers will be able to convert their tokens. Ether (ETH) in ETH2 and earn staking rewards.
The company said:
“While the targeted ETH2 tokens remain stuck on the beacon chain, Coinbase will also allow trading between ETH2, ETH and all other supported currencies that provide liquidity to our clients.”
Coinbase has indicated that it “will communicate more details as each feature approaches the launch”.
The news comes on the eve of the highly anticipated launch of Ethereum Beacon Chain, which kicks off a multi-year update of the blockchain network. The update will transfer Ethereum from its existing proof-of-work consensus to a proof-of-stake network. Ethereum’s development team says proof-of-stake reduces centralization risks and allows for stronger defense against attacks by 51%.
Phase 0 of Eth2 was confirmed last week after the Ethereum deposit contract reached the low threshold of 524,288 ETH. At press time, 855,264 ETH had been sent to the Deposit Agreement 2.0.
Ethereum holders who choose to stake their coins will not be able to withdraw or transfer their stake until after Phase 1 is launched, a process that could take years. Several companies, including Darma Capital, are planning to offer intermediate staking that would allow users to continue accessing their capital.
Being the second largest cryptocurrency by market capitalization, Ethereum is one of the most liquid assets in all cryptocurrencies. It currently ranks third in daily volume, according to Messari.io. Coinbase Pro processes one of the largest volumes for the ETH / USD pair.
