Coinbase Launches Tezos Staking Rewards for US Investors

On November 6, 2019, Coinbase, the popular exchange and wallet provider, introduced a staking service for Tezos (XTZ), which enables users to earn dividends on their XTZ holdings just for depositing and holding the token on the platform.

In a blog post, Coinbase confirmed this would only apply to eligible US customers. International users will apparently not receive access to this functionality for the foreseeable future.

Eligible customers who deposit Tezos (XTZ) can opt for the exchange to use their stored tokens for staking. The process involves the users delegating their holdings to those running the blockchain software in exchange for sharing some returns.

The decision was taken in the context of huge interest from retail investors who were open to the idea of earning interest on their digital assets. 

Staking is an integral part of the crypto industry, with many exchanges allowing token holders to earn passive interest by keeping their coins in place.

Dividends to Count Around 5%

With Tezos proof-of-stake (PoS) network, users can now stake XTZ token and earn returns on it every three days once their initial holding period completes 35–40 days. 

Following the exchange’s fees deduction, Coinbase is expecting its staking’s annual return to count around 5%.

Staking allows customers to earn returns on their crypto assets for authenticating transactions and also empowers them to vote on changes in the blockchain.

Why Coinbase Stakes Tezos On Behalf of Clients 

The San Francisco exchange explained that it is offering an easy and secure way for anyone to participate in the Tezos network actively. 

While token holders can stake XTZ on their own or via a proxy staking platform, it can be confusing, complex, and risky when it comes to the security of the staked tokens. 

Cryptocurrency service providers need to come up with new ways to keep customers affiliated, and Coinbase believes offering its staking rewards will help reward users with more assets from the network while keeping their crypto assets safely on the platform.