Binance Research: Ethereum’s Switch to Staking Will Transform Industry

Research Analysis wing of Binance argues that Ethereum’s pending switch to proof-of-stake (PoS), staking to set a major impact on the industry.

On Oct. 28, a report was published by Binance Research that highlights the largest 10 crypto assets supporting or deemed to support- staking represents a cumulative market capitalization of $25.8 billion.

As of press time, this means prospective staking dominance stands at roughly 10% of the total industry market capitalization.

An Investment Strategy

Staking is specific to Proof-of-Stake (PoS) blockchains while allowing network participants to passively earn a form of “interest” by depositing their tokens to both maintain the network and potentially earn rewards.

Nodes in a PoS network are engaged in validating blocks rather than mining them as opposed to Proof-of-Work (PoW) blockchains like Bitcoin. The algorithm selects block validators based on the number of tokens a given node has staked in their wallet-i.e. deposited as collateral in order to complete the addition of the next block to the chain.


Have you read our latest report? Don't forget that @Binance offers #staking services for many popular cryptoassets like @Algorand (ALGO), @StellarOrg (XLM), and @Tronfoundation (TRX). Deposit your coins and start earning rewards in less than 1 minute. https://t.co/wY5yWnKneh https://t.co/gD0K47NdHn — Binance Research (@BinanceResearch) October 29, 2019

Excluding Ethereum, the cumulative staking market capitalization, as of Oct. 24, is worth around $11.2 billion — $6.4 billion of which is staked.

Lock-Ups and Liquidity

Binance data indicates that 43% of tokens are staked vs. 57% in free circulation across all blockchains.

Some chains might allow users to “un-stake” their coins instantaneously while forfeiting any unclaimed rewards, others may entail a mandatory lock-up period that renders funds illiquid and could lead to missed active investment opportunities.

Ethereum 2.0 validators can reportedly expect to earn from 4.6% to 10.3% as rewards for staking on an annual basis.

To become a validator, participants are required to hold a minimum of 32 Ether (ETH) — worth $5,952 by press time. The transition to Ethereum 2.0 is currently slated for January 2020.

Source: Cointelegraph| Binance Research

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