Prominent crypto-exchange Coinbase, announces staking rewards for every Tezos (XTZ) held on the exchange.
Staking is the process of securing a PoS (Proof of Stake) Network in return for a reward. The exchange estimates an annual return of 5% from Tezos (XTZ) deposits on Coinbase for eligible US customers. The annual rate of return, however, varies with the network statistics. With an increase in the number of stakeholders, the rate return is likely to be less than 5%.
Moreover, it also kick-started the Coinbase Earn Tezos campaign, where Coinbase users can earn up to $6 worth Tezos rewards by participating in quizzes.
The price of Tezos (XTZ) at 4: 30 hours UTC on 7th November 2019 is $1.15. Price surged more than 30% on a daily scale as it broke above $1.20.
The announcement caused a lot of frenzy in the market opening for arbitrage opportunities as well. Users rushed to Coinbase to increase their holdings. It recorded a high of $1.25 on Kraken, while it surged to $1.90 on Coinbase. The rise of Tezos on Coinbase is about 80%.
Alex Kruger, an economic analyst of markets tweeted,
The spread on $XTZ between Coinbase and Bitfinex or Kraken has been over 20% for over an hour now. By the way, $XTZ is up 70% in Coinbase tonight. Just another day in crypto.
The spread between the price on Coinbase and Kraken reached a high of $0.65 (more than 50% of its value). Even now, three hours into the break-out, there is a premium of about 7% on Coinbase compared to other exchanges.
The trading volume of Tezos spiked four times compared to the average volume last week. By enabling staking for every XTZ on Coinbase accounts, the exchange has given its full range of support for the cryptocurrency in the US.
Do you think that increasing staking support could benefit other PoS cryptocurrencies as well? Please share your views with us.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com