Coinbase announces the transition to global Staking service, Staking becomes the most critical investment strategy in the blockchain ecosystem

The institutional asset custodian of Coinbase, the US cryptocurrency exchange, announced that it will begin transitioning to Staking services on November 21.


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When promoting mortgage services to a global investor community, Coinbase Custody appears to be leveraging its brand awareness to promote collateral as a key emerging investment strategy in the blockchain and cryptocurrency sectors.

The announcement states that the custodian intends to "properly provide encryption priority functions such as staking" to all of its global customers.

As of March 2019, Coinbase Custody has been providing agency-level Staking services for Tezos (XTZ), but to meet the eligibility requirements of the jurisdiction, the company's exchange will launch support for XTZ staking to US customers earlier this month.

How does the mortgage service (Staking) work?

Staking is specific to the Prosperity Proof (PoS) blockchain, which essentially allows network participants to passively earn some form of "interest" by storing their tokens to maintain the network and receive token rewards.

In contrast to the Workload Proof (PoW) blockchain like Bitcoin, nodes in a PoS network are used to verify blocks rather than mining them. A deterministic algorithm selects a block validator based on the number of tokens that a given node has invested in its wallet (ie, the number of tokens deposited as collateral) to complete adding the next block to the chain.

During the winter of 2018, the long-lasting cryptocurrency, mortgages were called cryptocurrency managers and analysts called investment "survival" strategies, many of whom stressed that HODL holders may also benefit from them in the long run.

Based on the fundamental advantages of PoW versus PoS encryption assets in terms of trust and security, opposition voices (including Bloomberg's Aaron Brown) opposed the long-term viability of the strategy.

Ethereum's transition to PoS and the wider industry

The research department of Encrypted Asset Exchange, Binance, recently published a report on Staking's significant impact on the industry. The report examines the impact of token lock-in on liquidity and compares the potential risk-reward profile of Staking as a passive investment strategy and active trading. Binance itself has launched a mortgage service this fall.

With the Ethereum network finally preparing for the transition to PoS-based Ethereum 2.0, Collin Myers, global product strategy leader at Ethereum Eco Development's ConsenSys, recently revealed that Ethereum 2.0 verifiers receive an annual Staking return of approximately 4.6. % to 10.3%.

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