“We see primarily two types of Staking services: Custodial and Non-custodial. Both can be great, but for different users,” Svante Jørgensen, a Blockchain Engineer at Bitcoin Suisse, told Trustnodes before further adding:
“Non-custodial staking requires very little trust (almost none if done right) and is therefor very accessible for stakers. But its hard to build securely and is very inflexible in the services you can offer on top of it, because you are always constrained by very rigid security concerns.Custodial staking requires a high degree of trust, but is in turn very flexible in what services you can offer on top, both from a sleek and easy UI point of view, to a rich set of complex services to utilize your liquidity bound in staking.
At Bitcoin Suisse we have a track record of keeping very large amounts of crypto safe, since 2013. As we have already established a high degree of trust, both from track record and regulatory compliance, custodial staking is where we can provide the most value for our customers. So that’s the route we are taking.
One of the neat features we can offer because we are custodial, is no lower limit on staking size – so no 32 ETH minimum.”
Once the ethereum 2.0 genesis block launches perhaps in late spring or early summer, ethereans can get circa 6%-8% in interest for validating the new blockchain through staking which performs as a miner.
You can do this yourself or use a service that provides the set-up for you to do it while controlling your private keys in a non-custodial way, or you can transfer the eth to a custodian.
It is probable Coinbase will act as such a custodian for staking, but the biggest name so far to come out and say so is Bitcoin Suisse.
They plan to charge 15% of the profits for the service at the beginning, with Jørgensen stating:
“We’ll start with 15% fee on earned rewards. But we’ll of cause adapt to always have competitive prices, pending how the market shakes out in the months after the Beacon chain launch.”
They also provide eth trading as well as collateralized lending to large clients. Loans that are a bit similar to DAI or Compound with the collateral requirement here being 200% at an interest rate of circa 10%.
“We’re big fans of decentralization and DeFi, but we see that there are people wanting to get into crypto who give up navigating the complex space and want an easier entrance to it. And also people who want features not yet supplied by crypto systems. We provide what they need as a bridge between traditional and decentralized finance,” Jørgensen says.
So making this platform a potentially competitive environment between ethereum staking and Cefi loaning with bots perhaps easily able to move between the two to arbitrage for maximum profits.
The eth staking rate is variable as you might know so if there are 10 million eth staking, you might get 6% in rewards, but if it’s ◊30 million, you might get just 2% or less.
If Defi dapps or Cefi platforms like Bitcoin Suisse offer more in interest than staking eth, ethereans might lock their eth in these platforms instead of staking.
A balance should then be found between the two to provide a reasonable level of interest in crypto, with the ethereum ecosystem so now developing to be a complex financial industry where coders in particular can scalp quite a bit of “free” value just by running their bots around.
Making it a very innovative space as finance is upgraded to natively digital while being reduced to just code.