Binance Launches a Staking Platform
Binance, a major cryptocurrency exchange, has set a dedicated staking platform afloat. And the firm announced this on September 26. In addition to that, this latest service will allow Binance users to deposit their token holdings and gain staking rewards. Aside from that, they don’t have to set up their own nodes to fulfill minimum staking amounts and time lengths.
In blockchains that use a Proof-of-Stake (PoS) system, nodes in the network became engaged in validating blocks, instead of mining them. Then, a deterministic algorithm selects block validators based on the tokens’ number a given node has staked in their wallet. In other words, they deposited as collateral to compete to add the next block the chain.
Moreover, staking holdings in a PoS network can yield significant percentage returns. But it will depend on the capacity of the participant’s stake. And this enables investors the opportunity to earn a form of interest on their holdings. And this will be possible as long as they locked up their funds to maintain and potentially profit from a given blockchain network.
The Offer of Binance
Furthermore, in the company’s announcement, Binance disclosed its plans to update its staking calculation methodology on October 1. And they aim to establish what it believes to be a more accurate and fair distribution of rewards. Also, this will be possible by providing several snapshots for user balances within a given day instead of a single daily snapshot.
But not all cryptocurrency commentators see the launching of staking services of Binance in a positive manner in the industry. Chang Peng Zhao, Binance CEO, tweeted, “You literally don’t have to do anything. Your funds on Binance automatically participate.”
Zhao even cleared that they could still trade as they usually do.
And Primitive Ventures founding partner Dovey Wan answered, “That’s why RIP for all StakingaaS Exchanges gonna eat it.”
He insisted that custodial wallets and PoW pool will eat it too, ending up to the terrible bottom business.