Binance Research: Ethereum-based Staking Services Booming on Proof-of-Stake Networks
According to a recent report by Binance, staking services are no longer a promotional gimmick, but now a consensus defining parameter. The report highlights that staking services of the top 10 crypto assets account for over $25.8 billion in market cap.
— Binance Research (@BinanceResearch) October 28, 2019
Staking is now a new buzzword in the cryptocurrency world. Although the concept existed long ago since the proof-of-Stake consensus was introduced, the concept didn’t get the public focus until it became a top-yielding method recently.
So, what’s the concept?
Staking first came to existence on the Peercoin network as a tool for the hybrid of PoS and PoW based systems. However, later, the feature transpired only for the Proof-of-Stake (PoS) based networks.
In the PoS consensus, the asset holders participate in block hashing as well as ecology governance via voting, authorization, pledging, lock-up, and delegation. This is done to obtain the profits in the form of trading fees, block rewards, and governance voting rewards, among others.
Size of Staking Market
According to the Binance report, staking is booming. Only two months ago, staking projects had a total market cap of $16.24 billion, with a total value locked in staking being $6.17 billion. But now the figure has risen to $25.8 billion in merely two months.
Ethereum Rollout to Double the Economic Activity
As if staking has not risen high enough, the economic activity that's associated with staking is only poised even to double given that Ethereum is planning to switch to a proof-of-stake network.
The crypto market will be massively boosted from staking as soon as Ethereum completes its transfer from PoW to the PoS blockchain network.
With the move, staking will undoubtedly take a substantial share of the market's attention. More infrastructure players will support staking, and hence the whole ecosystem will mature.
Moreover, the switch to Proof-of-Work will likely lead Ethereum to be more scalable. Staking helps the governance process as well as makes it transparent and gives an equal opportunity to the participants for staking claims in becoming a validator for the block.
Therefore, from the Binance report, staking is on the move to the top. Under the stimulation of economic factors, the market will only continue to rise as the number of projects as well as staking assets increase.
As much as staking coins can result in huge benefits, several factors might affect your staking rewards such as inflation rate, estimated annual yield rate, lock-up period, types of staking order, and service fee.