Decentralized blockchain application Qtum has received a major boost, after several cryptocurrency exchanges announced support for its new offline staking feature. Binance joins the likes of OKEx, Huobi, CoinDCX, and Gate.io by letting users earn QTUM for holding tokens. The news follows an announcement that Binance will support the upcoming Qtum network upgrade.
Qtum Offline Staking Explained
Until now, crypto users have had to rely on a third party or operate their own full node to enjoy the benefits of staking. But Qtum are looking to change that with offline staking, which will become available on the mainnet at block height 680,000 on August 28, when the mainnet hard forks. Providing the user’s cold-storage wallet supports the staking delegation function, from that moment forward they will be eligible to earn QTUM rewards without having to custody their funds, learn about the intricacies of operating a node, or incur VPS costs. And because exchanges are now supporting Qtum staking, participating is as simple as delegating funds to the staking pool of the platform in question.
Iterations of a simplified staking solution have been posited before of course, notably by Tezos (XTZ), whose users are able to set up their own validator – though with the caveat that said validator must hold at least 10,000 XTZ. Qtum’s innovation could be a game-changer, allowing addresses from hardware wallets to securely delegate their UTXOs (Unspent Transaction Outputs) to an online node that operates Proof of Stake consensus for the UTXOs of that offline address.
As for exchanges like Binance, they get to share the smart contract network’s feel-good factor and expand the virtual currencies they support for staking purposes. Everyone’s a winner.
Introduction of Staking Proves Timely as Defi Booms
Ostensibly, Qtum’s offline staking solution will be pitched at supporters of decentralized finance (defi), enabling them to earn a return while keeping their crypto holdings safe. Defi has been positively motoring in recent months, with the total USD value locked in its protocols surpassing the $6 billion mark in August. This marked a six-fold increase since the $1 billion barrier was broken in early February, with new stablecoins, DEXs, and staking services shipping at warp speed. As for Qtum’s native token, its value is up almost 60% in the past month.
A smart contract platform based on the same UTXO model as Bitcoin (BTC), Qtum is viewed by its supporters as a scalable alternative to Ethereum. The Qtum team have done nothing to dispel this notion; its developers recently pointed out that “relatively low TPS on Ethereum and the rising fees due to network congestion have been torturing defi users.” The platform also announced a $1M fund to encourage third party developers to create defi applications on Quantum Chain.
In the aftermath of its much publicized hard fork upgrade, Qtum expects to be governed by hundreds of smart contracts and DAOs, and for its community to stake their QTUM and enrich the network. With the likes of Binance having pledged to support offline staking, September should be a very interesting month.