A surprise settlement last week between the U.S. Securities and Exchange Commission (SEC) and Kraken, a leading crypto exchange platform, raised existential questions for the future of “staking” on blockchains like Ethereum. Ethereum experts and blockchain analysts say the seemingly adverse industry development in the U.S. may bring benefits, such as helping to decentralize the Ethereum network and forcing service providers to clarify how they earn yield for retail investors. The settlement, first reported by CoinDesk, forced Kraken to wind down its staking-as-a-service offering to U.S. clients. Previously, the service allowed retail investors to “stake” some amount of cryptocurrency with blockchains in exchange for yield. So-called proof-of-stake blockchains like Ethereum enlist users to stake crypto assets as a form of security guarantee in exchange for rewards, similar to interest payments. Proof-of-work networks like Bitcoin, by contrast, are operated by a more energy-intensive process of crypto “mining.” (Ethereum famously transitioned from proof-of-work to proof-of-stake last year.) The Kraken-SEC settlement could spell doom for a growing class of staking-as-a-service products, which allow users to stake with lower up-front costs or technical know-how than typically required. Around $25 billion worth of ether (ETH) is currently staked on Ethereum, with 18% of that stake held by Coinbase and Kraken – the two largest platforms with staking services.
Full story : How the SEC Could Reshape Ethereum’s Staking Landscape for the Better.
