Why is the SEC hitting PoS staking… or is it not doing that at all? – An UPDATE ????
In his recent article in #Cointelegraph , Andrew Singer lets experts have their say on the #SEC enforcement against Kraken Digital Asset Exchange‘s Staking -as-a-Service, including my own assessment ????
Opinions actually vary, from once-off action, not to further worry ????️, to continued boiling the water with unknowing destination ????
But what is #Staking and its actual purpose for the #Blockchain network, and what in contrast is Staking-as-a-Service?
STAKING: Staking is the act of depositing an amount of native tokens of the underlying blockchain to activate validator software. As a validator you’ll be responsible for storing data, processing transactions, and adding new blocks to the blockchain. This will keep the blockchain secure for everyone and earn you new tokens of the blockchain in the process ???? – Primarily, hence, it is about securing and operating the system, and not about investing. It’s like what miners do in the #Bitcoin blockchain ????, just without CO2-emissions.
STAKING-AS-A-SERVICE (SaaS):
SaaS is a service provided by third-party providers acting as node operator that allows individuals or businesses to stake their cryptocurrencies without the need for technical expertise or infrastructure like with solo staking. In return, they distribute the rewards, or part of it to the stakers. There are 2 SaaS models to be differentiated:
1) NON-CUSTODIAL SaaS: The staker keeps its wallet keys, hence control over its digital assets, and can withdraw them any time.
2) CUSTODIAL SaaS: The staker leaves its keys, granting access to the digital asset to the provider, who also acts as custodian. Thereby, the staker literally hands in its control over the digital assets to the custodian. Usually centralized exchanges (#CEX) offer custodial SaaS, in any case the U.S.-based Kraken exchange did so.
Only custodial SaaS is under the scrutiny of the SEC ????
Exciting times, more to come, stay tuned …
