Coinbase, the US-based crypto exchange known for ease of use, security, and regulatory-compliant operations, has announced 100% offline staking support for Tezos (XTZ), the 19th-largest cryptocurrency by market cap.
Coinbase announced the development via a blog post on March 29, where they stated:
“Today, we’re announcing Tezos (XTZ) staking for Coinbase Custody clients. We’re proud to be the first full-service, regulated, comprehensively-insured, and 100% offline staking provider in crypto.”
Tezos is the first operating proof-of-stake protocol for the issuance of smart contracts and dapp development. Offline staking of Tezos is made possible thanks to its Delegated Proof-of-Stake (DPoS) mechanism and the supporting of its Turing-complete smart contract.
In addition to supporting staking for the Tezos cryptocurrency, Coinbase also added that in the coming weeks they will be adding governance support for the Maker (MKR) protocol.
Passive Income From Staking in a Safe and Secure Way
Proof-of-Stake (PoS) is an alternative way of securing a blockchain network by incentivizing coin holders to stake or delegate their assets to someone running the blockchain software (a trusted node or validator). By staking your coins, you secure the network and receive some rewards from the validator for mining blocks.
In a way, it’s similar to securing the blockchain through proof-of-work (PoW) but uses a different algorithm for achieving consensus and mining blocks.
According to Coinbase, their institutional clients have been interested in staking cryptocurrencies but thought the risk was too high with the products available to them. However, Coinbase says they have removed this risk and their clients can now stake their coins risk-free.
As stated by Coinbase:
“Prior to today, the risk necessary to actively participate in staking has mostly outweighed the return… Coinbase Custody changes this calculus. No other staking provider has our track record of security and regulatory compliance, nor our comprehensive, best-in-class insurance coverage.”
Adding to Coinbase’s statement, Kathleen Breitman, the co-founder of Tezos said:
“The launch of Tezos staking through Coinbase Custody serves an acute need that existed up until now: a way for institutional participants who rely on a secure, offline custodian to take an active role in the network. Achieving our mission of creating a ‘digital commonwealth’ means facilitating participation for all, and that includes the institutional customers that Coinbase Custody brings to the space.”
Governance Support for Tezos (XTZ) and MakerDAO (MKR)
In addition to Coinbase’s support for staking, the exchange will also be supporting the other side of these sophisticated staking coins, participation in governance. Per the announcement, Coinbase will be launching Maker and Tezos voting in Q2 2019.
MakerDAO is one of the most sophisticated and fastest growing projects on Ethereum, as more than 200 projects are integrating Maker’s Dai stablecoin, the most decentralized stablecoin in the market.
With Coinbase’s governance support, customers who store their MKR on Coinbase Custody will now be able to participate in voting for the first time, which further decentralizes the MakerDAO governance.
Speaking on the importance of this development is Rune Christensen, Founder and CEO of MakerDAO:
“Decentralized governance is fundamental to the success of the Maker project. Coinbase Custody will provide an essential service by providing a way for institutional holders to participate in the system and vote with their MKR.”
Coinbase continuously surprises us with new developments and features. What will they come out with and support next? Let us know what you think in the comment section below.
