Bitco, a cryptocurrency provider, has begun to support the cryptocurrency staking as part of its insured hosting service. The currencies currently supported are Dash and Algorand (ALGO).
Prior to this, the company's business involved only secure storage services for cryptocurrencies, but did not provide features such as staking. Staking refers to the process of generating revenue by pledge tokens to maintain a PoS network such as Dash. Now, providers of staking services can have their own cryptocurrencies in BitGo – and then pass the rewards generated by staking to their customers.
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Many companies have begun offering this service to their customers. The first is the blockchain bank Celsius Network, which has partnered with Battlestar Capital, a provider of staking-as-a-service. Celsius offers the staking business for Dash. The operation of the Dash network depends on the primary node. The company moved the main node to BitGo, which means that its customers' tokens are covered by insurance.
This new service means that BitGo customers can now participate in the staking of these two tokens, earning 7% to 13% of the proceeds.
BitGo Chief Technology Officer Ben Chan said:
“Staking allows our customers to get a return on their investment without having to transfer assets out of the hosting platform.”
The company also acquired Hedge, a staking architecture startup. BitGo said it has integrated Hedge's automated security deployments, hardware security modules (HSMs) and security encryption into its own platform.
Chan said the acquisition will help BitGo provide "an automated end-to-end" staking service.
BitGo's new business marks the evolution of hosting solutions. Historically, storage service providers like Xapo have kept cryptocurrencies in treasury or bunkers deep underground, completely cutting off the Internet. This is "cold storage" and is generally considered to be less risky than "hot storage." Hot storage means that people can get cryptocurrencies over the Internet. BitGo's solution is to take advantage of insurance to instantly acquire assets to make up for any losses.
In addition, this program allows token owners to participate in chain governance – and it is almost impossible to put your cryptocurrency on the ground. This means they can vote on network upgrades and their cryptocurrencies are also secured.
BitGo plans to expand this service in the future to provide more PoS currency hosting services for other staking service providers.