The company’s staking rate for ETH is nearly twice that of some of its biggest competitors.
Binance US is the most recent major crypto exchange to offer Ethereum stakes on its platform.

On Wednesday, the company announced that users could now stake the second largest cryptocurrency market cap by market capital and receive rewards at a rate of 6% APY.

This is a significant step ahead of major competitors like Coinbase and Lido, which offer 3.5% and 32.55% respectively. BlockFi and Nexo only offer 4% and 5% respectively for ETH staking despite their high-risk, high-reward business models.

However, stake rewards are subject to change based upon Ethereum transaction fees volume and other factors according to Binance US.

Ethereum staking will offer APY say Binance US CEO

Brian Shroder, Binance US CEO, stated in a press release that “As Ethereum network transitions towards The Merge”, he said that ETH staking now offers APY rewards with some of the most high-quality ETH tokens in the market.

This is Ethereum’s long-awaited upgrade. It will combine the network’s consensus layer (known as the beacon chain) with its execution layer which is the current Ethereum corenet. This merger will complete Ethereum’s transformation from a proof of-work consensus system to a proof of stake.

The merger is expected to occur sometime between September 13th and 15 . Ethereum users will then be able stake their Ethereum to secure the network and earn passive ETH rewards.

Based on current beacon chain numbers, the Amber Group, which is a crypto financial service firm, has estimated the rewards for validators could be between 8% to 12% APY. There’s a catch.

To become a single staker, you must pledge at least 32 ETH to the network. At current prices, it’s approximately $50,000. This is more than most users would need.

Users have shifted to centralized staking platforms (also known as staking pool) instead. These providers make a cut of stakers’ profits but they also significantly lower the entry barrier. Binance US requires only 0.001 Ethereum to get started. That’s roughly $1.50 in ETH today.

However, this raises concerns about the possible centralization in the Ethereum network and how it may impact its ability to remain crypto-censorship-resistant as U.S regulators set their sights increasingly on crypto.

Only four staking providers, Lido, Kraken and Coinbase, currently control almost two-thirds staked ETH. This means that only a handful of large companies have an important role in validating transactions on this network. This has led to concerns about possible censorship at the protocol level due to the Treasury Department’s recent sanctions against Tornado Cash.

In mid-August, Coinbase CEO Brian Armstrong said that he would sooner close down his company’s stake business than to censor transactions. It is not yet clear how other central companies would respond to threats from regulators.


Source link

About Author

Angie Byrd