- Coinbase educational rewards
The most straightforward approach to begin accruing cryptocurrency rewards on Coinbase is through educational rewards. In return for acquiring knowledge about the fundamentals of specific cryptocurrencies (typically by viewing concise videos), you can receive some to experiment with personally.
Since the inception of educational rewards (previously known as Coinbase Earn) in 2018, participants have garnered over $100 million in cryptocurrency, including 0x, Basic Attention Token, Zcash, Stellar Lumens, EOS, Dai, Tezos, Orchid, Compound, Celo, Nucypher, and the Graph.
- Utilize a portion of your cryptocurrency for staking
Numerous cryptocurrencies presently employ a “Proof of Stake” consensus protocol a method by which their decentralized networks guarantee that all transactions are authenticated and secured without the mediation of a bank or payment processor.
With such cryptocurrencies, you can acquire rewards merely for aiding in the network’s security by “locking” a portion of your assets into a staking pool for a predetermined duration. In return, you will receive rewards. This is an excellent choice if you intend to retain the cryptocurrency for an extended timeframe instead of allowing it to remain inactive, you can put it to productive use.
Through the primary Coinbase application or website, qualifying users can stake Tezos, Cosmos, or ETH and earn up to 6% APY (contingent upon the type of asset being staked) as of June 2021. Visit coinbase.com/staking for further information.
- Convert your dollars into stablecoins
One possible drawback of staking rewards is that they are disbursed in the native cryptocurrency, which may exhibit volatility. However, you can earn rewards simply by purchasing and retaining dollar-pegged stablecoins such as Dai and USD Coin (USDC).
As of June 2021, you can secure 2. 00% APY rewards merely by holding Dai in your Coinbase account. Additionally, you can earn 0. 15% APY for holding USD Coin and potentially more through USDC Lending (refer to tip No. 4).
- Lend a portion of your cryptocurrency through CeFi
It can occasionally be challenging to maintain dollars in a conventional savings account while obtaining a meaningful yield. Yet, stablecoins have rendered a remarkably similar proposition feasible. An increasing number of centralized finance (or CeFi) products have emerged, offering attractive yield for maintaining some of your cryptocurrency holdings in stablecoin form. Coinbase users seeking a low-risk investment can initiate earning 4. 00% APY via USDC. Cryptocurrency deposits are not insured or guaranteed by the FDIC or SIPC.
- Lend a portion of your cryptocurrency through DeFi applications
If you are comfortable with greater potential risks for the prospect of higher returns, you may explore lending some of your cryptocurrency via DeFi applications. (DeFi remains a nascent technology, so ensure that you do not invest more than you can afford to lose if you choose to engage with these protocols. )
DeFi can facilitate transparent, peer-to-peer lending for potentially superior returns compared to conventional financial options. Investors who provide their cryptocurrency to DeFi lending protocols obtain rewards for lending to borrowers. It is necessary to have a cryptocurrency wallet that is compatible with DeFi applications. Coinbase Wallet (which is an independent product from the primary Coinbase application and is accessible to anyone, not exclusively Coinbase clients). Through Coinbase Wallet, you can explore lending a portion of your cryptocurrency the easiest method to initiate is with a stablecoin through DeFi protocols such as Compound or Aave.
