Kraken announced the launch of the new Tezos staking service: You can leverage Proof of Stake (POS) holdings to safeguard crypto networks and obtain financial rewards.
Key Advantages to Staking with Kraken:
- Start earning rewards instantly, with no waiting or lockup periods
- Enjoy one of the highest returns in the industry at a fixed rate of 6%
- Payouts every Monday and Thursday
- Stake your tokens in just three clicks from your Kraken Spot Wallet (i.e. the balances listed on your Overview page)
- You can quickly exit from your staking position by transferring tokens from your Staking wallet back to your Spot wallet
What’s the Difference Between Proof of Work and Proof of Stake?
Networks such as Bitcoin and Ethereum function because they have miners willing to leverage their computing power to process transactions and safeguard the blockchain. This process is known as Proof of Work (POW).
However, POW blockchains have faced some criticism for:
- Slow confirmation times
- Limited throughput
- Large carbon footprints
Staking Makes Your Crypto Work for You
Many newer blockchains are utilizing a new form of achieving consensus, known as Proof of Stake (POS), to process transactions. POS is a much less energy-intensive process, making it more environmentally friendly, and it offers faster confirmation times.
It works like this:
- Instead of expensive, high-powered nodes processing transactions in exchange for compensation, users post a percentage of their crypto holdings as collateral to achieve the same result.
- The best part is, aside from helping advance the blockchain industry, users who ‘stake’ their holdings to a network can earn monetary rewards for doing so. Not only are you providing a social good by staking your crypto, you are also receiving compensation.
Introducing our First Staked Token – Tezos
Tezos is an open-source POS blockchain that utilizes a native crypto asset (XTZ – a.k.a. a Tez or Tezzie) designed to provide secure, institutional-grade smart contracts that are robust enough to use in mission-critical environments (think: aerospace, nuclear, semiconductor industries).
- A key differentiator for Tezos is its modular architecture, which makes it easy to upgrade the network.
- Unlike Bitcoin or Ethereum, where there is no official process for updating the ledger to increase throughput or make design changes, Tezos has a formal upgrade mechanism. This allows the network to propose and adopt new technological innovations smoothly as they emerge, without sacrificing community consensus.
- Its functionality is similar to Ethereum and it supports a wide range of distributed applications, known as dapps.
- Individuals or companies that operate validators (or nodes) will be compensated with Tezos in exchange for processing transactions on the network.
- Blocks are added to the network every 60 seconds.
- Entities who stake will collectively earn ~ 42 million Tezos on an annual basis.
- Kraken will earn a percentage of this based on the number of blocks its validator creates.
- We will distribute these earnings to staking clients per the agreed terms.
- Today, each Tezos is worth $1.48.
How to Get Started
- Staking is available from now, December 2019
- All you need to do to begin is put Tezos into your Kraken Staking Wallet. To do this, navigate to “Staking”, then under “Tezos (XTZ)” click “Stake.”
- However, you must first have Tezos in your Spot Wallet.
- This can be done by transferring Tezos that you hold off of the exchange into your Kraken Spot Wallet, or by purchasing Tezos directly from Kraken.
- We currently offer XTZ/USD, XTZ/EUR, XTZ/CAD, XTZ/XBT and XTZ/ETH trading pairs
- You will start to accrue rewards instantly.
Clients that stake Tezos will receive a 6% return annually (rewards will be paid out every Monday and Thursday).
The Fine Print
- Staked tokens are inaccessible for trading or withdrawal.
- Kraken assumes liability for any loss of staked tokens except for the events described in the Staking User Agreement.
Additional tokens will be available for staking in the future – watch this space and follow bitcoin news switzerland!