Sirlibz
Staking is the process of locking cryptocurrencies in a cryptocurrency wallet in order to receive rewards while contributing to the blockchain network.
Coinbase stakes Tezos on behalf of customers and also distributes the rewards directly to customers’ accounts. With the launch, Coinbase is offering an easy, secure way for the United Kingdom and European countries (France, Spain, and Netherlands) to participate on the Tezos Network. In our article on Tezos review, we indicated that anyone who wanted could become a Baker( Tezos term for Stakers), and if an individual chose not to do this directly, he could delegate to another user.
Coinbase had previously launched this feature for the US users alone back in November. Since then customers have earned over $2 million in Tezos from staking.
What to Expect
Coinbase is offering you a platform to simply stake Tezos with a click without having to go through the confusing, complicated means.
- Coinbase promises an estimated 5% Annual returns on Staked coins. You get to see your pending rewards increase on the platform and you get to receive rewards every 3 days with the option to opt out and withdraw your Tazos funds at any point in time.
- You have control over your assets, you earn tokens by keeping funds in your Coinbase wallet, this means you can still see your funds among other assets on your balance.
Tezos network sets the return rate based on the number of participants in the staking, so Coinbase cannot for a certainty give a specific return price. The estimated annual 5% returns promised to users is as a result of the rewards that had been generated over the past 90 days.
Tezos as a cryptocurrency is subject to market fluctuations, as a result staked assets will have a dynamic price over time. Coinbase will send out a portion of your reward and take their commission.
Conclusion
Staking can help grow one’s investment portfolio exponentially if you’re an investor that invests and holds to the investment for a very long amount of time. The POS protocol focuses on those with a large stake, that is a large amount of coins in order to get a good amount of return. The more coins, the more staking power. Banks too have started giving interest rates to any that would hold BTC in their accounts with some of them having deposit bonus.
