Coinbase has temporarily halted the rewards payout for its ETH staking service due to a technical complication. It will take three days to resolve the issue.
Coinbase has temporarily halted the rewards payout for its ETH staking service, the exchange announced on May 16. The cause was a minor technical issue, which Coinbase is addressing.
The exchange assured users that it is still accruing the rewards and will set their payout once it resolves the issue, which is expected in the next 48–72 hours.
Rising Popularity of Ethereum Staking
Like other services of its kind, Coinbase allows users to deposit their ETH and earn staking rewards, the rate for which is currently 6%. The benefit of Coinbase’s ethereum staking service, which has led to its increasing popularity, is the fact that it does not require a minimum of 32 ETH to begin staking.
It is also worth noting that the halting of the staking service has nothing to do with the United States Securities and Exchange Commission’s (SEC) actions against ETH staking. The latter has shown concern about staking services for violating securities laws and has already fined Kraken $30 million for failing to register its staking service.
However, Coinbase has had issues with regard to its staking service. This has led to some grievances on the part of the crypto community.
Staked ETH Stuck
Last week, ETH rewards became stuck on Coinabse because its systems did not support ETH addresses from external validators. The crypto community took to social media channels to vent their frustration, with a large number of withdrawals stuck in the queue.
Coinabse has also introduced the Coinbase Wrapped Staked ETH (cbETH) utility token, which is a 1:1 representation of staked ETH. This token allows holders to use it as collateral in the DeFi market.
Ethereum Inflows to Coinbase Rise
Coinbase is also seeing an increase in ETH inflows as a result of increasing staking rewards. This is mostly due to meme coins taking over the Ethereum network. This is especially true for PEPE, which has clogged the network and is pushing gas fees up.
The spike in Ethereum inflows has inadvertently caused an increase in Ethereum staking, which in turn exacerbated the issues. Validators on the Ethereum network recorded an all-time high of $46 million in the first week of May, a peak that could soon be surpassed if the interest in staking persists.
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