According to a court of law or according to Coinbase?

Coinbase's argument hinges upon a blockchain not being a "common enterprise." The rest of their arguments are even weaker.

More accurately, Coinbase is claiming their staking service does not count as a security under the Howey Test. A judge or panel of judges will be the ones making the actual determination, Coinbase’s claim has yet to be tested in court.

Coinbase is engaged in motivated reasoning here; they're trying to find every reason they can to not label their services as securities. I'd have to look up precedents to find more detailed guidance as to particular prongs, but offhand:

1. I really need to look up case law to decide if Coinbase is right on the investment of money part here, and I suspect in part it relies on technically-detailed arguments I have no knowledge of. But if your money is locked up, it's almost certainly meets this prong, and my understanding is that staking does lock your assets for a time.

2. The not-"common enterprise" argument here boils down to "it's all down by computers, so how can it be a common enterprise?" Which feels like the sort of gotcha legal loophole that plays out poorly in courts, although I will admit that I don't know the case law in detail to evaluate this claim well.

3. Expectation of profit is derived in large part from how it's advertised, which... yeah, this is going to point towards security. I should note in particular that in trying to describe why Coinbase's staking service doesn't meet this prong sounds suspiciously like the original scheme in the case that provided the Howey test. This alone should cast significant doubt on the entire analysis.

4. The "efforts of others" again relies on the "it's just computers, so obviously it can't count, right? ... right?" style of argument as prong #2, but even less convincingly.

The only way this even tries to make sense is by creating the idea that the obviousness of it being a security (you're lending something of value to an enterprise in hopes of generating return) doesn't count, because it's a computer or something.

Like if the exact same thing was accomplished by people it's obviously a security but since it's done by code (which was magically and immaculately conceived, presumably) then it's different somehow.

It's not different. Coinbase wants people to give them money, have them do [complicated thing] then give them a return on that money.

They compare staking to mining. Cryptocurrency mining is a business activity that fulfills the last three criteria but mining on its own is not a security. The only confusion is whether the staked cryptocurrency counts as an investment of money.