Stake Capital Tezos Baker to move to 0% Fees
Stake Capital offers a wide range of DeFi and staking services. We provide financial instruments designed to maximize returns on this new asset class while embracing the ecosystem’s core values. As regard to Tezos staking service, you can find our tutorial on how to set up your Tezos delegation and get rewards effortlessly.
Binance initiates a user-acquisition war and threatens the sustainability of the ecosystem
While Proof-of-Stake consensus (PoS) are becoming the preferred consensus in the industry, Delegated-Proof-of-Stake (DPoS) are considered by many to be a more effective and democratic version of the PoS mechanism. Tezos and other blockchain projects (Cosmos, Loom, Livepeer…) have recently democratized this type of consensus, allowing anyone to delegate their assets and thus benefit from the rewards of securing the underlying networks.
Tezos being the best known network using a DPoS consensus to date, big crypto exchanges have just started to add Tezos staking services to their platform, although Stake Capital have offered its service for almost a year now. On Dec. 4, Binance, one of the largest exchange of the crypto-industry, has initiated a user-acquisition war by announcing that they would offer a Tezos staking service for 0% fees. While there is uncertainty as to whether Binance service will remain free throughout its lifetime, it will quickly attract those who want to maximize their staking rewards. This announcement has the potential to attract a major part of XTZ holders (Tezos tokens) and push many competitors out.
However, it is important to note that this competitive offer does not come without consequences for the security of the underlying networks.
Not only would this race for free services push current competitors out, but it would also seriously compromise the security and governance core features of PoS networks. By centralizing the staking supply as well as the associated on-chain governance votes, Binance could rapidly damage the health of the ecosystem.
We provide 0% fees while ensuring a proper security and governance on-chain
We are proud to announce that as of today, Hotstake Baker acquired by Stake Capital last year is now offering a 0% service fees on our Tezos staking service*!
Our Baker: `tz1Z3KCf8CLGAYfvVWPEr562jDDyWkwNF7sT`
This transition will be in effect until the launch of the Stake DAO, a new revenue-sharing cooperative model that will allow to keep a better deal than Binance, even with a commission-based service. The Stake Capital DAO will distribute value generated by its services to stakeholders (e.g. delegators). The DAO functions as a cooperative, whereby stakeholders earn Stake Capital’s work token (SCT) for providing collateral and, via a staking mechanism, receive a share of the revenues generated by Stake DAO. The vision is to further align incentives between service providers and capital holders to ensure all stakeholders benefit from the success of the provision of the supported staking services.
Additionally, the Stake DAO doesn’t have to centralize the supply. As noted in the Light Paper, Stake DAO can grow to support multiple infrastructure providers without compromising the decentralization of validators nodes.
A new model to compete with large exchange offerings
Stake DAO will also introduce a new liquidity feature to leverage locked XTZs with the introduction of the Liquid Token. In addition to get the right to vote for the updates of Stake DAO services, all the DAO stakeholders will be able to get full liquidity on their XTZ. While rewards are distributed monthly on other services, Stake DAO users will benefit from this liquidity on their staking assets that are usually locked-up. Based on the movement of the commissions, it will let delegators the option to hedge their position whenever they want. Thus, instead of staking for free on an exchange, users can instead gradually earn a piece of the Stake DAO to discount the fees, while taking advantage of this new liquidity feature. It is then a different model where the DAO can grow to compete with large exchange offerings.
Stake DAO vision
After a successful past year at Stake Capital, gradually decentralizing our internal business processes and incentives to the public feels like the next logical step. We are thrilled to participate in this organisational revolution, and hope to gather as much feedback from the community as possible.
To learn more about the DAO structure, feel free to read our light paper.
If you’re interested in being an early participant, you can register your interest here.
* 0% Tezos staking Offer limited up to 1 Million USD and will start on Monday, December 9, 2019. If you have any questions please join our Telegram chat.
