Coinbase extends Tezos staking rewards to UK and select European customers

Crypto exchange Coinbase has rolled out Tezos staking rewards for customers based in the UK, France, Spain, and The Netherlands. Customers will now be able to earn an estimated ~5% annual return on their otherwise idle XTZ holdings by keeping these funds on the exchange.

The announcement fits within the trend of Coinbase’s ever-expanding staking services. After launching Tezos staking rewards for Coinbase Custody clients about a year ago, it extended these same benefits to all U.S. customers in Nov. 2019. More recently, the exchange announced its custody arm allows clients to earn inflation rewards on ATOM and ALGO holdings.

Why it matters:

• As long as regulators don’t stand in the way, Coinbase should keep expanding its support for staking rewards. The exchange has turned Tezos staking into a legitimate revenue generator, earning almost $900k since it made XTZ rewards available to U.S. customers (based on its 25% fee).

• While perhaps a welcoming announcement to most XTZ holders, the underlying concern is that the increased demand for exchange-based staking services will give these entities more control over the supply and, for networks sporting coin-weighted voting systems, governance decisions. Coinbase, alongside Kraken and Binance, has already amassed a significant share of XTZ supply, and thus voting power. This distribution imbalance has not had any overly negative implications as of yet. But, as we’ve witnessed during the recent Steem saga, other entrants may not always act with the best intentions.