US crypto exchange giant, Coinbase, has announced that it has enabled staking benefits for its users to earn passive yields as high as 3.58% by holding their SOL (Solana ecosystem’s native token) in their accounts.
Coinbase made the announcement via its blog and said the feature would gradually be made available to all its users.
The crypto exchange will give those who staked SOL an estimated annual percentage yield (APY) of 3.85%. Rewards will be compounded and given out every three to four days.
As it stands, Coinbase currently gives its users an annual percentage yield (APY) of just 3.675% on Ethereum staked on the platform. However, yield rates are affected mainly by the quantity of tokens locked up through staking on each network.
Solana staking has been available for a long time via other centralised exchanges such as Binance, FTX – to mention a few – as well as self-custody wallets such as Phantom. However, Coinbase takes 25% of the staking reward that the Solana network gives out, and then doles out the rest to participating users.
The exchange will let users withdraw their staked SOL funds at any time, with no lock-up period, under the condition that users must hold at least $1 worth of SOL.
Staking is a popular way to make money passively from your crypto assets without – essentially – doing anything. Staking is a way for people who own crypto to put their assets to work and earn passive income by locking them for a period of time.
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Staking is like putting money in a high-yield savings account for your cryptocurrency. When you put money into a savings account, the bank usually lends that money to other people. In exchange for putting your money in the bank, you get a tiny amount of the interest that the bank makes from lending.
In the same way, when you stake your digital assets, you lock up the coins so that you can help maintain the blockchain’s liquidity. In exchange, you get rewards based on how much money you make. Most of the time, these returns are much higher than any interest rate a bank offers.
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