Coinbase launches institutional staking service

29 Mar, 2019
by Alberto Arnaldo
News
Coinbase launches institutional staking service

Only a couple weeks have passed since the irruption of the #DeleteCoinbase movement in response to their acquisition of a shady company, but Coinbase seems to be back trying to make some money, perhaps trying to cover their recent losses.

According to a report published today by Coinbase-funded crypto news site Coindesk, the U.S.-headquartered exchange will be leveraging the expanding proof of stake mechanism which more and more tokens are incorporating in detriment of proof of work.

Tezos will be the first PoS network to have that function enabled on Coinbase. Therefore, those who agree to allowing the exchange to stake the asset for them, will see returns of around 6.6% when discounting for management fees. The percentage is not that bad taking into account the low risk situation and the lower yields which most guaranteed or low-volatility traditional assets tend to offer.

However, there is a certain risk involved: for staking purposes, funds need to be in “hot wallets”, which are online and therefore much more vulnerable to hacks than other types of storage.

Sam McInvale, from Coinbase Custody, said with regards to how they will be profiting from the service that they will be taking between 20 and 25 percent of about 8% Tezos yield, “so the client would actually be earning like 6.6 percent and we would be earning the rest”.

Some highlighted peoples of Crypto Twitter have already commented on the news:

Read more: Coinbase is deleting accounts without warning, according to several users#DeleteCoinbase: Kraken reaches out to Coinbase employees

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Read more about: Coinbase Tezos (XTZ)

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