Coinbase becomes the largest Tezos validator with 30.6 million XTZs

  • The American crypto exchange, Coinbase, has become the largest validator in the Tezos network.
  • The Tezos price continues to soar as more and more exchanges offer their staking service.

Not only has Tezos risen to the top 10 by market capitalization a few days ago, but it has also received a lot of attention from various crypto exchanges. After Binance and Coinbase introduced the staking for Tezos (XTZ), Kraken also declared its support for staking a few days ago.

According to a recent analysis, Coinbase has become the largest validator for Tezos (XTZ). Coinbase has overtaken Polychain Labs as the largest Tezos validator. According to the tweet from “tWAN”, Coinbase now leads the list of top 5 validators with 30,660,081 XTZ, ahead of Polychain Labs (30,541,7390 XTZ). Cryptium Labs (23,150,400 XTZ), Binance (14,904,414 XTZ) and P2P Validator (12,561,200).

The development comes as no surprise, as it was already clear that Coinbase would have to buy additional Tezos to offer its staking service. The reason for this is the way the Tezos Proof of Stake (PoS) works. Exchanges have to buy and hold Tezos to be able to participate in staking. Twitter user “The Don” pointed out a week ago that Coinbase still has more than a million XTZ tokens to buy in order not to lose their staking rights and to be able to pay out users.

Staking as a new trend for crypto exchanges

In recent months, there has been a trend whereby more and more crypto exchanges are introducing the staking of various coins. Binance is at the forefront of this trend and currently offers staking for nine coins, including Tezos, ATOM, TRON, Algorand and Qtum. According to Bobby Ong, co-founder of Coingecko, this trend is likely to continue, making exchanges the top validators of networks.

The incentive for the exchanges is the commitment of their customers and the simplicity of offering this service. As Ong commented, that this makes it difficult for staking as a service providers to hold their own:

We will soon see exchanges dominating most top validators list. Staking as a Service companies will struggle. Exchanges will compete to offer zero fee staking. Easier for users and exchanges can cross-subsidise from their trading biz. Users gets further entrenched into exchanges.

In the long run, this could trigger a decentralization problem for networks such as Tezos. Ong therefore suggested that it would be interesting if exchanges would let users decide to choose their “Tezos Baker” themselves. However, he believes that this is unlikely, at least in the short term.

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Tezos price flying high

For the Tezos price, however, the current developments are extremely positive. Since the exchanges are forced to buy Tezos (XTZ), a buying pressure is triggered which could cause Tezos to rise further in the long run. The value of the cryptocurrency has risen by 42 percent in the last 30 days alone. Since the beginning of the year, Tezos has recorded a phenomenal gain of 241 percent.

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About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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