How to earn crypto rewards

The easiest way to start generating crypto rewards on Coinbase is through learning rewards. In exchange for learning the basics about certain cryptocurrencies (usually by watching short videos), you can get some to try for yourself. 

Since the launch of learning rewards (formerly Coinbase Earn) in 2018, users have received more than $100 million in crypto including 0x, Basic Attention Token, Zcash, Stellar Lumens, EOS, Dai, Tezos, Orchid, Compound, Celo, Nucypher, and the Graph.

Many cryptocurrencies now use a “Proof of Stake” consensus mechanism — which is a way their decentralized networks can ensure that all transactions are verified and secured without a bank or payment processor in the middle. 

With such cryptocurrencies, you can earn rewards simply for contributing to the security of the network — by “locking” some of your holdings into a staking pool for a certain timeframe. In exchange, you’ll earn rewards. This is an excellent option if you were planning to hold onto the crypto for a longer period — instead of having it sit idle, you can put it to work for you.

Via the main Coinbase app or website, eligible users can stake Tezos, Cosmos, or ETH and earn as much as 6% APY (depending on the type of asset being staked) as of June 2021. Visit coinbase.com/staking to learn more.

One potential downside of staking rewards is that they’re paid in the native cryptocurrency, which can be volatile. But you can earn rewards simply by buying and holding dollar-pegged stablecoins.

As of June 2021, you can earn 2.00% APY rewards by simply holding Dai in your Coinbase account.

It can be challenging at times to hold dollars in a traditional savings account and earn meaningful yield. But stablecoins have made a very similar proposition possible. A growing number of centralized finance (or CeFi) products have emerged that provide compelling yield for keeping some of your crypto holdings in stablecoin form. Crypto deposits aren’t insured or guaranteed by the CDIC or CIPF.

If you’re comfortable with higher potential risks for higher returns, you can experiment with lending some of your crypto via DeFi apps. (DeFi remains an emerging technology, so make sure not to invest more than you can afford to lose if you decide to experiment with these protocols.)

DeFi can enable transparent, peer-to-peer lending for potentially higher yields than traditional financial offerings. Investors that supply their cryptocurrency to DeFi lending protocols receive rewards for lending to borrowers. You need a crypto wallet that is compatible with DeFi apps. Coinbase Wallet (which is a separate product from the main Coinbase app and can be used by anyone, not just Coinbase customers).Via Coinbase Wallet, you can experiment with lending some of your crypto — the simplest way to start is with a stablecoin — via DeFi protocols such as Compound or Aave.