Can someone explain in layman terms how yield is produced when staking on coinbase?

Are they gambling with my Solana?

Is my solana at risk?

Where does the extra Solana come from that they are paying me every few days?

  • artica_james@alien.topBEnglish
    1·
    10 months ago

    If you are referring to Staking and holding crypto on Coinbase exchange, then it is seriously not recommended.

    Firstly it’s custodial. The exchange holds your private keys and therefore the assets you hold/stake on there are in the exchanges complete control. Exchanges are known to suspend/pause withdrawals during high volatility events leaving you without access.

    Secondly it harms decentralization of the network - Coinbase has a very high concentration of stake already, in fact they are the largest node by stake weight (in the superminority).

    Much better to use a non-custodial wallet such as Phantom/Solflare and stake to validator/s of your own choice.

    Would recommend to give u/Cogent_Crypto staking guide a read https://medium.com/@Cogent_Crypto/solana-staking-guide-part-1-6a6a85f07b56

    StakeWiz is a great tool to checkout metrics of validators and avoid staking with anyone on this list https://stakeview.app/poor.html