Kraken – a crypto exchange based in San Francisco, CA and arguably one of the most popular in the United States – has acquired a staking platform simply known as “Staked” for an undisclosed sum.
Kraken Gets Its Hands On Staked
According to a statement, Kraken’s acquisition of the company is one of the “largest crypto industry acquisitions to date.” It marks the fifth for the digital currency exchange and builds on the company’s newfound goal to become the “crypto portal of choice for both retail and professional investors.”
Jesse Powell – the man in charge of Kraken – announced in a recent interview:
We are excited to add Staked to our portfolio of yield products, which has seen great uptake by a growing population of crypto investors. Staked is highly complementary to our existing staking business and will allow us to further strengthen our product offering through world-class infrastructure for clients who prefer to retain custody of their staked assets. We’re excited to welcome Staked’s clients to Kraken and believe that they will benefit from access to our wider portfolio of products as they seek to broaden their engagement with digital assets.
Staking has become a very popular tool in the world of cryptocurrency for several reasons, a big one being that it can yield handsome returns for those who engage in it. The process occurs when traders allow their digital assets to be lent to potential borrowers. These borrowers can use the money for whatever purpose they like, though they are under scrutiny to pay the funds back to a shared pool.
Granted they do not pay back all the money within an allotted period, the person lending the funds out earns interest on their stash, and thus garners profit for each month they are not returned. The process is very similar with standard lending in banks and the world of traditional finance, though this time, it’s crypto being lent out and not fiat.
Why Is This Process So Popular?
Staking is also popular given that it is allegedly more energy efficient. This is the main reason as to why Ethereum – the second largest cryptocurrency by market cap and the number one competitor to bitcoin – is switching from a proof of work (PoW) module, which it’s employed for years, to a proof of stake (PoS) module. Known as Ethereum 2.0, the new blockchain is slated to move much faster and will allegedly require fewer gas fees, which in turn leads to fewer transactions and helps to conserve energy and protect the planet.
The new acquisition also puts Kraken in the path of Ethereum 2.0 and pushes it closer to its goal of becoming a primary ETH2 depositor. The exchange currently holds two of the top five spots and will likely see another big push through its obtainment of Staked.