The decision was taken in the context of huge interest from retail investors to earn interest on their crypto assets.
Coinbase has recently announced on its blog that all of its users from the United States will be able to receive staking rewards for the tokens that they hold on the company’s wallets.
Coinbase has introduced a staking service for Tezos (XTZ), which enables users to earn dividends or interest on their XTZ holdings just for depositing and holding the token on the platform.
Coinbase explains that through its newest offering eligible US customers who deposit Tezos (XTZ) can opt for the exchange to use the stored assets for staking. The process involves the users delegating their token holdings to those running the blockchain software in exchange for sharing some profit.
The decision was taken in the context of huge interest from retail investors who were open to the idea of earning interest on their crypto assets. The US major crypto venue is also no strange to staking rewards as Coinbase Custody, its institutional crypto-asset storage service, has originally introduced the staking service for Tezos (XTZ) in March 2019.
Before now, only customers from Coinbase Custody were able to stake this cryptocurrency. As only institutional clients were accepted in this category, though, this limited the access of retail users from the country. During the first two months in which Tezos staking was allowed to institutional investors, the revenues generated were around $7,500 to $8,300 USD.
Meanwhile, Coinbase isn’t the only one platform doing staking as other large crypto exchanges also move toward staking-as-a-service offerings. Additionally, this couldn’t come at a more interesting time for XTZ, which has seen a listing spree as of late.
“Coinbase is offering an easy, secure way for anyone to actively participate in the Tezos network. While it’s possible to stake Tezos on your own or via a delegated staking service, it can be confusing, complicated, and even risky with regard to the security of your staked Tezos,” the San Francisco exchange explains.
According to the official announcement, with the Tezos proof-of-stake (PoS) network, clients can now stake XTZ token and earn a return on it each three days once their initial holding period completes 35–40 days. Following the company’s fees deduction, Coinbase is expecting its staking’s annual return to count around ~5 percent.
Staking, the company explained, enables users to earn dividends or interest on their digital assets for validating transactions and also allows them to vote on changes in the blockchain.
In the future, the company is ready to expand the staking rewards and also list other tokens that can be used in the system. However, the name of no other token that will receive rewards was divulged in the blog post.
To read more related articles: Click here