In the first half of 2021, Kraken clients received $100 million in stake rewards.

According to a recent JPMorgan analysis, staking is on track to become a $40 billion sector by 2025.

  • Year-to-date, assets staked on Kraken have increased from $1 billion to roughly $5 billion.
  • According to JPMorgan researchers, staking might make the bitcoin market more appealing than other asset classes.

The crypto exchange Kraken said Monday that it handed out more than $100 million in staking awards to users in the first half of 2021, as analysts believe the staking sector will explode in the next years.

Bitcoin and other proof-of-work coins are created by machines competing to solve complicated equations in order to mine coins and digital assets. Proof of stake, on the other hand, selects validators from a pool of people who possess a coin, providing them with a source of revenue without the need for sophisticated mining hardware.

According to the company, staking allows customers to optimize their holdings in staking cryptocurrencies and fiat that would otherwise be resting in a Kraken account. On top of their holdings, a person can receive rewards — which Kraken pays out twice a week — and compound those future awards to expand their holdings even more.

As consumers seek new, innovative ways to earn rewards on their crypto riches, the total number of assets staked on Kraken has increased from $1 billion to roughly $5 billion year to date, according to the firm.

In a statement, Kraken Chief Product Officer Jeremy Welch said, "Being a successful crypto exchange is no longer just about being a trading platform; it's about offering a range of goods and services so clients can leverage their crypto riches more efficiently." “Kraken is doubling down on its staking service to make it one of the most complete solutions in the market, with $100 million in rewards currently handed out to clients.”

The first-half figures come just a few weeks after JPMorgan released a report claiming that staking is becoming a rising revenue stream for cryptocurrency intermediaries, despite concerns about the amount of energy required to generate bitcoin and other proof-of-work tokens.

According to JPMorgan researchers, staking presently generates $9 billion in revenue for the crypto economy, with that figure expected to rise to $20 billion following the Ethereum merger later this year. It adds that if proof-of-stake becomes the dominant protocol, it may reach $40 billion by 2025.

The JPMorgan research report adds, "We believe staking will make the cryptocurrency markets increasingly attractive relative to other asset classes, yield-generating or not." “Staking not only lowers the opportunity cost of owning cryptocurrencies vs other asset classes, but it also pays a considerable nominal and actual yield in many circumstances. We see the opportunity to make a positive actual return as one of the elements driving the cryptocurrency sector to become more widespread as the volatility of cryptocurrencies falls.”

CoinFund and ParaFi Capital led a $5.2 million fundraising round for crypto staking platform ClayStack earlier this month. The funds will be used to assist ClayStack develop a secure and open platform that will reshape the present staking ecosystem, according to the startup.


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