According to the official announcement released on Sept. 26, the new platform will allow Binance users to earn staking rewards from the cryptos in their exchange wallets, without requiring setting up their own nodes to meet the minimum staking amounts and/or time periods.
Binance has also announced its intent to update its staking calculation methodology on Oct. 1, so it can distribute the rewards in a fairer and accurate manner. The new system involves using multiple snapshots for user balances within a given day, instead of a single daily snapshot.
A tweet from this morning posted by CEO Changpeng Zhao explained to Binance users the simplicity of the process:
“You literally don’t have to do anything. Your funds on Binance automatically participate. You can still trade as you normally would.”
The coins that will have staking supported on Binance are Neo, Ontology, VeChain, Stellar Lumens, Algorand, Qtum, Strat, Komodo, and Stratis.
Binance received staking rewards for its Stellar holdings this summer, and this prompted the exchange to launch staking support for XLM and to distribute its earned rewards to its users. The exchange then introduced support for Qtum staking.
Founding partner of blockchain-based investment company Primitive Ventures, Dovey Wan did not see the new launch as a good idea:
“That’s why RIP for all StakingaaS Exchanges gonna eat it, custodial wallets gonna eat it, even PoW pool gonna eat it, and then the remaining is a race to the bottom Bad business, just bad.”
Others from the community shared their disapproval on Twitter, as a staking service operated by a leading industry exchange raises the question of centralization issues, but Wan attacked the problem from a different angle:
“I’m assuming the opportunity cost on staking/locking is flat lol if considering that it’s a complete GG. So most of them [token issuers] need to inflate massive amount (further dilute the value and further sell pressure down the road)”
Featured image: Finance Magnates