Market cap shows how much has been invested in a specific network. When trying to identify the next big cryptocurrency, two things to keep an eye on are similar to what a stock investor would keep an eye on: market capitalization and price. He says this asset class “has now evolved far beyond cryptocurrencies” to decentralized finance, NFTs and other investment vehicles. “I believe we are in the early stages of a multi-decade secular shift towards digital assets, as the evolution from an analog to digital world has been transformed forever due to COVID-19,” Dorman told GOBankingRates in an email. Much of it has to do with a fundamental change in how digital assets are perceived, said Jeff Dorman, chief investment officer at Arca, a financial services firm that specializes in digital assets. With the move, Coinbase seems to be sending a clear signal that it will keep pushing ahead with its staking services, regardless of regulatory queries.Before figuring out which cryptocurrency might be the next big winner, it helps to understand why so many investors are gravitating toward cryptocurrency in the first place. While the Beacon Chain is currently running in parallel to Ethereum, it will replace the proof-of-work algorithm as the consensus layer after the much-anticipated Merge.Ĭoinbase’s announcement comes at a time when Brian Armstrong, the company’s CEO, has said that Coinbase would exit the staking business altogether, rather than censor transactions as a major stakeholder in the Ethereum network.Ĭoinbase also said in its most recent 10-Q form, that its staking services are among customer programs about which the SEC has made investigative subpoenas and requests. This makes the company the 2nd-largest staker, according to a Dune Analytics query. Second Largest StakerĬoinbase already has deposited 14.7% of the ETH in the consensus layer of Ethereum, called the Beacon Chain. One big upshot of Coinbase issuing its own ETH LSD is it may attract more users to stake Ether - with cbETH, users can potentially earn additional yield while also accruing staking rewards.Īnd staking is a big business for Coinbase - the company gets 8.5% of its revenue from staking tokens on behalf of customers, according to Bloomberg. Until now, parties with traditional corporate structures haven’t entered the LSD game - Lido has a decentralized autonomous organization (DAO) component that votes on governance proposals, and Rocketpool bills itself as a decentralized protocol.Ĭoinbase, on the other hand, is the fifth-largest centralized exchange, which processed $1.7B in trading volume in the last 24 hours, according to CoinGecko.Ĭoinbase’s net revenue was $802M in Q2 2022, down over 60% from Q2 2021 when net revenue was over $2B. The basic advantage of ETH LSDs is that investors don’t lose access to their liquidity when staking their tokens to validate the network - they get all the benefits of staking ETH, while also being able to use the LSD in the broader DeFi ecosystem. Like Lido’s stETH and RocketPool’s rETH, cbETH can be freely traded, borrowed against, and used like any other asset on the Ethereum blockchain. The move marks the crypto exchange’s entry into a space dominated by decentralized players like Lido Finance and Rocketpool. A new token representing staked Ether just hit the blockchain.Ĭoinbase is launching a new liquid staking derivative (LSD) of ETH called cbETH.
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