In a press release shared with CryptoGlobe, Bitfinex, which was founded in 2012 and is based in the British Virgin Islands, said that this program would allow Bitfinex users to earn staking rewards “as high as 10% per year.”
Bitfinex also mentioned that the staked cryptoassets “will be held safely, utilizing Bitfinex’s secure in-house custody solution”, and that a staked digital token is “delegated by the exchange, meaning that the tokens remain in the platform’s control, secured in the same manner as other tokens.”
Paolo Ardoino, the Chief Technology Officer at Bitfinex, had this to say:
“We’re committed to engaging our existing users and the wider community with new products and innovations.
“The Bitfinex Staking Rewards Program provides our users with another avenue to increase their holdings on our platform.”
Bitfinex says that this program launches initially with support for the following cryptoassets:
- Cosmos (ATOM): 1.5% – 3%
- V.Systems (VSYS): 8% – 10%
- EOS (EOS): 0% – 3%
Support for Tezos (XTZ) should be ready by May 11, and support for Algorand (ALGO) and TRON (TRX) is “coming soon.”
Staking rewards are paid out weekly to users “based on a calculation of time and amount of digital tokens held by the user during the week.”
Currently, there is no minimum token holdings requirement to start using the staking service, and there are no fees, as Bitfinex plains below:
“We keep a small portion of the staking rewards we collect and deposit the rest into the accounts of our users. In some cases, our staking service provider also retains a portion of rewards collected by the digital tokens we stake.”
As for safety, Bitfinex assues its users that the staked assets never leave their cold wallets. Bitfinex is also taking some additional steps to minimize risk:
“We only stake a portion of the digital tokens we hold. Every digital token has its own way of implementing the staking mechanic, but the process usually begins with us using our cold wallet funds in order to delegate votes to a chosen validator node.
“Staking provides a layer of governance to its network participants which helps to make the network more secure and for that, network participants are rewarded.”
With regard to governance, Bitfinex says:
“For chains that implement governance mechanisms into their protocol, Bitfinex will not actively take part in any governance events using your tokens other than delegating to a trusted node of our choosing.
“Where we have partnered with a staking service provider, we will generally allow that service provider to make decisions regarding governance without our input.”
One last question you may have is whether it is posisble to trade/withdraw staked tokens. The answer is:
“Yes, you will be able to trade your staked tokens. Depending on the protocol, some staked tokens are ‘locked’ for a period of time.
“To accommodate withdrawals we only stake a portion of the digital tokens we hold.
“In the unlikely event that withdrawals by other users exceed the “un-staked” portion of the tokens we hold, it is possible that withdrawals will be delayed until the staked tokens are released. The duration of the potential delay would depend on the applicable protocol.”
On Tuesday (March 24), crypto exchange Bitfinex announced that it has “deployed a proprietary surveillance tool — Shimmer — to combat market abuse and help promote orderly trading on the exchange.”
Featured Image Courtesy of Bitfinex