Coinbase Prime, a platform for institutional investors and professional traders to set foot in the cryptocurrency market space, is all set to launch an Ethereum staking option for institutional investors in the U.S.
Moreover, Coinbase Prime transforms the process of staking into a cakewalk for institutional clients by providing end-to-end staking exposure. In addition to it, full Identity verification has to be completed for the Domestic institutional investor to become eligible for staking Ethereum (ETH).
Furthermore, as mentioned in the blog post issued by Coinbase on 1st August 2022, the funds and yield will be secured in cold storage, and Coinbase will hold the key to secure the transactions.
“Securing client funds is our highest priority. We hold withdrawal keys in our cold storage custody vault at all times, meaning staked ETH and accumulated yield are always safe. To further ensure the security of client accounts, staking transactions must first complete consensus before they are executed,” as mentioned in the blog post.
Coinbase Prime also offers to stake for Polkadot, Solana, Tezos, Celo, and Cosmos. Moreover, Ethereum (ETH) have been transitioned from ETH to ETH2 because of the change in the underlying consensus mechanism from proof-of-work to proof-of-stake. Furthermore, when the clients stake ETH, Coinbase will use the ticker ETH2, though the value of both the ticker symbols is the same.
The blog post mentions, “The term eth2 has been used frequently to describe an upgrade to the Ethereum network that aims to improve the network’s security and scalability. This upgrade involves a shift in Ethereum’s security model from mining (“Proof-of-Work”) to staking (“Proof-of-Stake”).”
In September 2022, ETH and ETH2 will merge, and after the merger, the annual percentage yield (APY) for Ethereum staking will increase between 9% to 12%. At the time of writing this article, the yield offered for ETH staking is 4.08%. Currently, the market cap of Ethereum staking is $21.5 billion, which is likely to increase to $40 billion post the merger of Ethereum 2.0.
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