Kraken Users Have Staked Over $1 Billion in Cryptocurrencies
Top crypto exchange Kraken made a significant splash when it announced its Ethereum staking service last year. Since then, it has gotten a substantial amount of commitment from users.
This week, the exchange confirmed its customers have staked over $1 billion in assets on its crypto service, marking continued growth.
Kraken Users Love Them Some ETH
Citing data from Jeremy Welch, Kraken's Vice President of Product, the exchange's users have now staked about 45.5 million XTZ (worth about $120 million) and 58 million DOT (worth $580 million). This adds to the 307,904 ETH ($368.5 million) already being staked on the platform. Welch added that staking positions' increased growth reflects investors' and traders' positive sentiment about cryptocurrencies.
The executive added that staking has also presented a paradigm shift in how people invest in cryptocurrencies. With the crypto asset class on a growth and maturity trajectory, investors are no longer satisfied with securing short-term gains. Many are getting more comfortable with locking their assets up for a long time because they believe the industry will keep growing.
As explained, Kraken launched its Ethereum 2.0 staking service in December 2020. In just four days, the exchange confirmed that it has seen over 100,000 ETH in deposits, with a value of $60 million at the time.
Everyone Wants to Get In on Ethereum 2.0 Staking
It's easy to see why Kraken's staking will draw so many investors. The exchange has impressive reward rates, with investors getting between five to seven percent based on network activity.
However, the exchange isn't alone in the Ethereum 2.0 staking business. Binance, the industry's largest exchange, launched its staking service in December, with investors getting between 5 and 20 percent in annual percentage yields (APY). It also provided extra incentives for customers who complete its know-your-customer (KYC) identity verification process.
Coinbase also announced two months ago that it would launch Ethereum 2.0 staking in the early part of 2021. The exchange has yet to provide additional details, although it would most likely offer commissions in similar ranges to its competitors.
The increase in staking activity is also coming at a time when Ether is on a significant upsurge. The asset's value has increased significantly over the past few weeks, rallying on the back of increased activity in the decentralized finance (DeFi) sector and on the back of Bitcoin's jump.
In a blog post, crypto exchange OKCoin also shared some insights n how the Ethereum 2.0 upgrade could drive the asset's price higher. As many know, the upgrade will essentially transition Ether into the Proof-of-Stake (PoS) consensus mechanism. It will also provide additional benefits in terms of Ether's transaction speed and costs.
As OKCoin explains, improvements in Ether's functionality should lead to a greater demand for the asset. Ether's price should continue to surge in the long run, leading to a boom for investors – and stakers.