Coinbase has introduced its Tezos staking rewards for users in the UK and certain EU member countries. Having initially launched for US customers back in November, the service enables users to earn dividends or interest on their XTZ holdings just for depositing and holding the token on the platform.
Coinbase explains that through its offering, eligible customers in the US, UK, France, Spain, and The Netherlands who deposit Tezos (XTZ) can opt for the exchange to use the stored assets for staking. The process involves the users delegating their token holdings to those running the blockchain software in exchange for sharing some profit. Since the US launch, customers have earned over $2 million in Tezos staking rewards.
The decision was taken in the context of huge interest from retail investors who were open to the idea of earning interest on their crypto assets. The US major crypto venue is also no strange to staking rewards as Coinbase Custody, its institutional crypto-asset storage service, has originally introduced the staking service for Tezos (XTZ) in March 2019.
Meanwhile, Coinbase isn’t the only one platform doing staking as other large crypto exchanges also move toward staking-as-a-service offerings. One of Coinbase’s biggest rivals Binance, meanwhile, made a push of its own into this space earlier last year.
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Additionally, this couldn’t come at a more interesting time for XTZ, which has seen a listing spree as of late.
Return to count around ~5%
“With yields on savings accounts and government bonds at record lows — and in many cases negative — in the UK and across Europe, staking offers our customers a simple way to earn rewards on assets held in their Coinbase accounts,” the San Francisco exchange explains.
According to the official announcement, with the Tezos proof-of-stake (PoS) network, clients can now stake XTZ token and earn a return on it each three days once their initial holding period completes 35–40 days. Following the company’s fees deduction, Coinbase is expecting its staking’s annual return to count around ~5 percent.
The return rate stated by Coinbase is a projection based on the rewards they have generated over the past three months, but the Tezos network itself who sets the actual return rate depending on the number of staking participants. And since the price of the staked Tezos fluctuates, the stalking proceeds are subject to different dynamics as dictated by the market.
Staking, the company explained, enables users to earn dividends or interest on their digital assets for validating transactions and also allows them to vote on changes in the blockchain.