LianGuai Report Blockchain July 15th The U.S. Securities and Exchange Commission filed a lawsuit against Coinbase on June 6, involving a small number of assets listed on its platform and retail staking services. Coinbase believes that staking services are not investments, but a core part of ensuring the role of the crypto economy for hundreds of millions of global users. For this reason, Coinbase has published an article explaining in depth why staking should be supported from four aspects.
1. Staking is crucial for the long-term development of the crypto economy
As a key player in the global economic and technological ecosystem, the importance of blockchain is self-evident. Nowadays, almost every major blockchain uses the proof-of-stake model, which means that proof-of-stake is crucial for the accuracy, security, and efficient operation of the blockchain. The innovative concept of “staking” has brought vigorous development to the crypto economy, mainly because it is open, secure, and environmentally friendly, enabling millions of users worldwide to securely access a wide range of financial and non-financial services.
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Essentially, staking is the process in which users ensure the security of the blockchain, facilitate block creation, and help process transactions by staking tokens. It is worth noting that users do not make investments in this process, but instead receive transaction fees and consensus rewards paid by the blockchain itself as compensation for playing this important role.
2. Staking is open and decentralized
Anyone can participate in ensuring the security of the crypto economy through staking. All users need to do is contribute their assets to support the network, making it easier for token holders to participate in network security. It is worth mentioning that there is no need to use staking service providers, as blockchain protocols allow anyone with a computer to run validators and stake independently. Since staking is designed to be decentralized, no company or government can control staking, further achieving the democratization of proof-of-stake.
3. Staking is environmentally friendly
Compared to the proof-of-work model and the aggregated economic value model used on other blockchain networks, proof-of-stake can validate blockchain transactions on a large scale and has higher energy efficiency. For example, the entire Ethereum network consumes an estimated 0.0026 TWh of electricity per year, which is 77,000 times less than global data centers and 50,000 times less than gold mining.
The U.S. Securities and Exchange Commission urges Coinbase and other listed companies to consider the impact of their business decisions on energy. However, if users are prohibited from contributing to proof-of-stake blockchains in the United States, it will undoubtedly exacerbate the environmental damage caused by cryptocurrencies in the future.
4. Staking is secure
Pledging is not a peculiar or complex financial product. In fact, it is not a financial product at all. Whether users pledge on their own or through Coinbase, they are always the owners of the cryptocurrency. Furthermore, unlike traditional financial loans, there is no risk of default for borrowers, as the underlying cryptocurrency is always held in custody.
Moreover, whether users pledge on their own or through a pledging service, any risks come from the protocol itself, and the risk scope is usually relatively small. Pledging is a way for pledgers to earn income and participate in the crypto ecosystem with low risk. Regardless of what pledgers decide to participate in, especially for individuals who choose to pledge through Coinbase software services, pledging itself does not add any additional risk.
Summary
Many regulatory agencies recognize the advantages of pledging in terms of the environment, finance, and security, unfortunately, the regulatory agencies in the United States have not recognized this. The United States is being led down a path of mandatory regulation, limiting user participation in pledging and hindering entrepreneurship and innovation in the field of cryptocurrency. Many markets are striving to become “crypto centers,” and it is more important than ever for the crypto community to unite and advocate for policies that support cryptocurrency.
Some content in this article is compiled from the Coinbase official website.
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