Staking Quietly Building Momentum | CoinSnacks

Staking Quietly Building Momentum

Although NFTs continue to get most of the airtime right now, staking is quietly building momentum with companies acquiring businesses, or raising large amounts of capital, to further the technology.

What’s Going On?

Over the past number of years, there has been an increasing shift of focus away from Proof of Work (PoW) and onto the Proof of Stake (PoS) consensus algorithms. Right now, 19 of the 20 largest smart-contract platforms are based on some sort of PoS consensus mechanism. Ethereum at a $500 billion market cap is expected to move completely to PoS in 2022.

What’s Staking?

Staking refers to the process of earning passive income on crypto assets. It involves users pledging their assets to the network to help validate transactions and make it more secure. In return, users get rewards (usually in the form of the asset being staked). Think of staking like interest rates… the only difference being that staking can be much more lucrative with yields being 5% or more (the current yield from the Staking Rewards index is 7.33%).

Who’s Getting Involved?

Well, it seems like everyone. Just in the past week we saw:

  • Staking firm Figment raise $110 million. The company is on track to do $100 million this year by taking a cut from the $7.5 billion in assets it manages for institutional clients
  • Kraken acquire Staked. Possibly in preparation for an IPO, Kraken acquired the company to offer non-custodial staking (users are fully in charge of their keys). Although terms weren’t disclosed, Kraken stated that it is “one of the largest deals in the history of crypto”. Even prior to the acquisition though, the exchange said that so far this year its staking business grew 950% to nearly $16 billion
  • Ether Capital (ETHC) staked 10,240 Ether with plans to stake 20,000 more. The company has partnered with Figment to handle the staking

It is becoming clearer by the day that blockchain technology will disrupt traditional finance and empower people to become their own bank via a transparent system that cuts out the inefficient middleman through code.

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