Coinbase Custody has recently announced that it will allow clients to stake their coins and earn interest on them. The first digital asset that will be supported for staking is Tezos (XTZ). The intention is to add more virtual currencies in the future. The information was released by Coinbase in a blog post on March 29.
Coinbase Custody Support Staking
Coinbase Custody users will now be able to stake their coins in order to earn some profits. Now, Coinbase Custody will help users and customers store their digital assets and participate in crypto networks.
The cryptocurrency market has different projects and virtual currencies. Some of them have a consensus algorithm known as Proof-of-Stake (PoS). PoS incentivizes participants to secure the blockchain by staking or delegating the assets to someone that runs the blockchain software. This is one of the ways to earn passive income on crypto assets.
Kathleen Breitman, the co-founder of Tezos, commented about it:
“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.”
Coinbase Custody clients are, in general, fund managers that act as fiduciaries to their investors. Due to the fact that there are several interesting PoS networks in the market, some of these investors have been thinking about whether to participate in these PoS consensus algorithms or not. However, due to the fact that the various platforms available in the market are not designed for larger investors, these decided not to invest in them. Coinbase Custody changes this and allows users to easily invest in PoS networks.
The first digital asset support is Tezos, but in the near future, MakerDAO is going to be supported. The funds will be 100% offline for all the client funds.
It is worth mentioning that Coinbase Custody will not only offering staking services but they will also be offering governance services. The firm is also launching Tezos and Maker voting. That means that investors will also be able to participate in the governance mechanism of these networks.