The crypto exchange Bitfinex now offers its customers to deposit EOS, Cosmos (ATOM) and V.Systems (VSYS) for the corresponding staking programs. Thereby up to 10 per cent “annual interest rate” beckons. For TEZOS (XTZ) staking at Bitfinex should be possible from 11 May.
Staking has developed in recent months from a niche topic to a trend in the crypto scene. In summary, staking is about storing suitable altcoins and thus supporting the validation of transactions in the respective block chain. As a reward for this commitment, tokens are again distributed. Because staking can sometimes be technically complicated for the normal investor, more and more crypto exchanges are implementing staking as a service for their customers. Bitfinex is new to this, as was announced in a blog post. To start with Bitfinex supports staking for EOS, Cosmos (ATOM) and V.Systems (VSYS).
How does staking work at Bitfinex?
Bitfinex follows the example of competitors like Binance and makes staking easy for its customers. First you choose which Altcoin you want to use for staking. At Bitfinex, EOS, ATOM and VSYS are currently available. Tezos (XTZ) is scheduled to follow on 11 May 2020, Algorand (ALGO) and TRON (TRX) are still waiting in the queue without a concrete date.
You then deposit the selected token in the desired amount on your Bitfinex account, which automatically qualifies for staking. A minimum amount is currently not required for Bitfinex.
From now on you can look forward to weekly distributions comparable to interest. Bitfinex forecasts an annual interest rate of up to 3 percent for EOS, between 1.5 and 3 percent for ATOM and between 8 and 10 percent for VSYS. For XTZ, between 3 and 5 per cent annual interest is predicted.
Bitfinex does not charge its own fees for the service, but passes on any fees from external service providers. Since not all suitable tokens stored at Bitfinex are submitted to the staking programs, the crypto exchange assumes that trading and debiting will still be possible. Bitfinex also promises not to interfere with decisions on the respective ecosystems with the staking coins, a question that has led to heated discussions in the past, for example at Steem.
Should I use Bitfinex for staking?
Binance as the world’s leading crypto exchange now offers staking for about 20 old coins, the complete list including the predicted annual interest rate can be found here. A direct comparison with Bitfinex shows that it can be worthwhile to check which provider offers the highest return. At Coinbase only staking for tezos is supported so far, likewise with octopuses. But Kraken wants to integrate staking for ATOM and DASH soon according to its website.
One thing should be clear to you before you decide for staking via a crypto exchange: You entrust your coins temporarily to the respective provider and have to rely on their security measures. You can avoid this dilemma at least for XTZ if you register them for staking with a Ledger Nano Hardware Wallet, which is possible since December 2019.