For the first time, Coinbase is enabling general clients to earn rewards just by holding digital currency, beginning with the Tezos (XTZ) token.
In a blog entry on November 6, Coinbase stated U.S. clients (except residents of Hawaii and New York) would now be able to stake the smart contract platform’s crypto with an approximately five percent yearly return.
Tezos utilizes an alternative consensus framework to proof-of-work mining—the system developed into the biggest digital currency by market cap, bitcoin. Dubbed proof-of-stake, the alternative mechanism rewards network clients for holding its coins and subsequently ensuring the network.
Coinbase’s five percent gauge depends on Tezos’ most recent 90 days of staking returns. The firm additionally underscores there’s an initial holding time of 35–40 days, after which stakers will begin to see rewards show up in their accounts every three days.
Also, the exchange has added Tezos to Coinbase Earn, a program intended for instructing the general public about crypto, and will give out XTZ to members finishing educational videos.
Coinbase soft-launched staking for Tezos and decentralized finance token Maker (MKR) on March 2019 on Coinbase Custody.
As Coinbase said at the time, Coinbase Custody principally serves institutional customers holding a lot of cryptocurrencies. On the other hand, this most recent project brings staking to even the smallest of Tezos holdings.
Coinbase also recently enforced 1.25 percent interest on clients’ holdings of the dollar-pegged stablecoin USDC.