Cardano’s founder: blockchain won’t suffer from staking ban
Charles Hoskinson listed several key differences between the investment programs of his network and the Kraken exchange
16.02.2023 - 10:20
203
2 min
0
Charles Hoskinson, the man behind Cardano, took to Twitter earlier today to address Kraken’s $30 million settlement with the Securities and Exchange Commission (SEC) recently. The crypto exchange had to shut down its staking services for American clients as part of the settlement.
Hoskinson addressed several concerns including the impact of this settlement on Cardano and the fate of staking in the US. During his live stream, the Cardano founder listed several key differences between the staking program of his blockchain and the one offered by Kraken, to reassure his community.
The first was the token burn mechanism that the SEC described in the settlement with Kraken. Hoskinson highlighted the fact that his protocol had no token burning or slashing mechanism in place. He added that Cardano’s staking payments were automated by the protocol, unlike Kraken’s staking program.
Furthermore, Cardano had a minimum staking requirement, unlike Kraken where “no staking minimums” were advertised. According to the SEC’s complaint, Kraken’s staking rewards were determined by the websites, not by the underlying blockchain protocol. Charles Hoskinson pointed out that with Cardano, there are staking certificates in place and protocol determines returns in a transparent and non-custodial manner.
According to Hoskinson, another major differentiator was the custodial nature of Kraken’s staking program, where interested investors transferred eligible crypto assets to the program. Furthermore, the staking program offered by Kraken set aside a portion of the crypto assets deposits for staking, as a liquidity reserve.
This essentially meant that the assets were locked. The highest returns for Cardano staking come from private pools, as opposed to Kraken where investors stood to make more in the form of regular rewards.
In light of the ongoing debate regarding the secretary status of staking products offered by centralized and DeFi operators, Charles Hoskinson called out rival blockchain Ethereum.
“Ethereum staking is problematic. Temporarily giving up your assets to someone else to have them get a return looks a lot like regulated products. Locking funds, encouraging centralization, and poor protocol design hurt the whole industry,” he tweeted last week.
This material is taken from the website coinedition.com.
Useful material?
Incidents
Roger Ver has been accused of not paying taxes
May 1, 2024
Mining
After the publication of the financial report, the company’s shares added 5%
Apr 30, 2024
Market
The commission had previously warned the developer of potential enforcement actions
Apr 29, 2024
Market
Funds can be seized by law enforcers due to links to illegal activity
Apr 26, 2024
Market
Tether Finance division will be responsible for the issuance and redemption of USDT stablecoins
Apr 18, 2024
Trends
The first project introduced on the platform will be BounceBit (BB)
Apr 18, 2024