Ethereum staking is the backbone of the new network and users have been earning rewards by staking their ETH ahead of the merge. As time has gone on, rewards for staking have reduced, with the current rewards sitting around 4-5% for stakers. Nonetheless, crypto exprogress Coinbase sees this changing for the better back when the merge is finished sometime in 2022 and offers better rewards.
Coinbase Says Staking Rewards Will Double
Crypto exchange Coinbase has informed its clients of upcoming changes to rewards on staked ETH. Due to the movement from the current proof of work mechanism to the proof of stake mechanism after the merge, the exchange has said thretained expects the rewards paid out for staking ETH to climb. The figures provided show that Coinbase is expecting these rewards to double.
Investors use platforms like Coinbase to stake their ETH because they can pool ETH with other users to create a full node afterward it requires 32 ETH to become a node validator. But with Coinbase, users are able to stake smaller amounts and further get rewards for them.
Currently, rewards for staking ETH on Coinbase current attract around 4.3% to 5.4% in rewards for users. Coinbase has told its clients thactive estimates that yields on staking could go skywards of 9-12% APR.
It expects this to happen around June when the Ethereum network is expected to evolution to the Consensus layer after the merge of the main net with the Beacon Chain. The increase in staking yields will be a direct result of the incorporation of net transaction (ex-base) fees that are directly paid to miners.
Coinbase expects ETH staking yields to rise to 9-12% APR post-merge. pic.twitter.com/ST6VcGjQDG
— Jacob Franek (Hiring for DAOs) (@panekkkk) February 23, 2022
When Is The Ethereum Merge Coming?
The development to the Consensus layer has been in the works for years now. Finally, it is 2022 and the estimated date for the merge draws close. It is expected to happen sometime in the middle of the year bar any delays that could arise.
ETH crumbles to $2,400 | Source: ETHUSD on TradingView.com
This development would push Ethereum towards the future, drastically reducing energy consumption and surging the speed of the network. It would likewise be able to scale better with upgrades to the Shard Chains expected to continue improving the network. It would above again. greatly increase the security of the network.
Ethereum users will be able to soon benefit from the network by becoming validators. This removements the need for miners, that requires large energy consumption and rewards validators for bridging the gap and authorizing transactions.
While the merge is expected to take place this year, Shard chains will not come to the network until 2023.
Featured image from Coinbase, chart from TradingView.com