| Peter Wind

Key highlights:

  • The Kraken cryptocurrency exchange says its users are staking more than $1 billion worth of cryptocurrency
  • The exchange’s users are staking $580M worth of DOT, $360 million worth of ETH, and $22.5 million worth of XTZ
  • Kraken’s VP of product Brian Welch says crypto investors are becoming increasingly confident of the longevity of the crypto asset class

Kraken users are staking over $1B worth of crypto

According to the Kraken cryptocurrency exchange, its customers have staked more than $1 billion worth of crypto assets through the exchange’s staking service.

Kraken users have staked over $580 million worth of DOT, the native asset of the Polkadot blockchain platform. ETH also represents a significant portion of the assets staked through Kraken – currently, over 307,000 ETH or around $360 million is being staked through the exchange. Meanwhile, Tezos stakers have staked about 45.5 million XTZ, or $22.5 million. Cosmos, Kava and Kusama are further examples of crypto assets that can be staked via Kraken.

While staking allows users to have their say in the consensus process and governance of proof-of-stake blockchains, many users prefer to effectively delegate this responsibility to cryptocurrency exchanges to avoid the inconvenience of running staking software or operating a node. While these users effectively give up their potential influence on the blockchain, they still benefit from staking reward (minus a small fee that’s usually collected by the exchange).

Kraken’s vice president of product Brian Welch said that the reason why staking is proving so popular is that crypto investors are increasingly confident in the staying power of cryptocurrencies:

»Whereas three years ago holders were mainly interested in securing short-term gains, many are now confident locking up tokens to earn passive income. Why? Conviction is growing in the longevity of crypto assets as a respectable new asset class.«

This is particularly evident when we consider the case of Ethereum – users who are staking their ETH now will not be able to withdraw their coins until Phase 1.5 of the Ethereum 2.0 transition goes live, and it’s unclear when the Phase 1.5 launch will actually happen. Despite this, there’s already $2.75 billion worth of ETH staked in Ethereum 2.0, showing that many investors are confident in the long-term prospects of the Ethereum project.

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