U.S. crypto exchange Coinbase has a reputation for having some of the highest fees in the industry. That status has been confirmed recently as it plans to charge a large whack for Tezos staking commissions.
Coinbase has been one of the first exchanges to embrace the new wave of proof of stake tokens by offering staking services for some of its customers.
The exchange also provided an educational section for users to earn certain coins it listed in exchange for watching videos about them.
It all sounded great until the catch was revealed, and that is that Coinbase wants a 25% commission on Tezos staking rewards.
The fee structure has been updated to include the following statement:
“If you stake your assets with us, your reward will be determined by the protocols of the applicable network. Coinbase will distribute this reward to you after receipt by Coinbase, minus a 25% commission.”
Coinbase has been capitalizing on the staking craze since November when it launched XTZ rewards for ‘eligible customers’.
Crypto twitter naturally erupted at this with a number of comments following this tweet.
LMAO at Coinbase charging people 25% to bake their tezzies. pic.twitter.com/Q2WrSQSsXD
— Charles (@CryptoCharles__) February 16, 2020
The comments that followed were to be expected such as ‘Coinbase is the Apple of crypto’ and ‘It’s like Coinbase wants to go out of business with this type of robbery.’
The Apple comment is apropos since Coinbase does simplify things for crypto noobies in an effort to onboard more users.
However, they have to pay for the privilege and there are more profitable ways of staking by using Tezos staking pools.
As co-founder of Pocketnodes, ‘Crypto King’ pointed out; “Coinbase is for basic bitches. If u want to stake. Do it right.”
Fees and commissions everywhere
Dai is another currency that Coinbase supports and offers educational videos for, and there too is a hidden catch.
The sting is not only for staking services it seems. This writer attempted to buy Dai on Coinbase with local currency and was hit with a charge of almost 4% for the privilege.
This is over half the current Dai Savings Rate of 7.5% making purchasing crypto assets on Coinbase to use with DeFi markets an exercise in futility.
Additionally, Coinbase leads the markets in crypto custody with over $7 billion in BTC held according to data from BitUniverse.
The need to sting Tezos stakers for further profits is making this crypto exchange look more like a high street bank every day.