South African crypto exchange VALR has launched staking, allowing customers to earn up to 5.9% in additional coins on two cryptocurrencies.
Staking lets cryptocurrency owners earn rewards in the form of additional crypto coins by contributing to the security of a blockchain network.
VALR’s staking service will initially support two cryptocurrencies and their respective blockchains — Solana (SOL) and Avalanche (AVAX).
VALR co-founder and CEO Farzam Ehsani said the service would allow users to earn staking rewards hourly.
“Our team handles all the technical aspects of on-chain staking, allowing our customers to easily put their crypto to work,” Ehsani stated.
“Furthermore, customers can stake and unstake their crypto assets at any time, giving them control and flexibility.”
Ehsani emphasised that customer funds are never lent out to third parties, ensuring their crypto remained in secure custody at all times.
“The staking rewards are generated directly from the blockchain protocol itself. That’s the beauty about staking,” Ehsani said.
To earn staking rewards, customers must pledge their cryptocurrency towards validating blockchain transactions.
Computers in the blockchain network — validators — carry out the transaction verification, so it does not require additional input from the staker.
In practice, it works similarly to a bank account with a fluctuating interest rate. Instead of fiat currency, “interest” is paid in crypto.
Since launching in 2018, VALR has processed over $10 billion in trading volume, which the company says makes it the biggest South African exchange by trading volume.
Its client base includes 450,000 retail customers and over 800 corporate and institutional customers worldwide.
The company recently obtained approval to offer crypto services in Europe and is busy obtaining licenses in Dubai, Mauritius, and South Africa.
Following amendments to the Financial Intelligence Centre Act, crypto companies in South Africa must apply for a licence from the Financial Sector Conduct Authority (FSCA) to offer their services.
The period in which existing exchanges can do so started from 1 June 2023 and will run until 30 November 2023.
VALR has welcomed the new regulations, arguing they enhanced anti-money laundering measures, the countering of terrorism financing, and the countering of the financing of proliferation of weapons of mass destruction.
VALR’s staking rollout comes a week after rival Luno launched Ethereum (ETH) staking.
That service allows Luno customers to open a staking wallet and earn up to 4% per year in ETH.
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