Coinbase allows for the first time ordinary users to earn rewards by simply holding a cryptocurrency, starting with the Tezos token (XTZ).

In a business blog Wednesday, Coinbase said US customers (residents of Hawaii and New York) can now play with the crypto of the smart contract platform with an estimated annual return of five percent.

Tezos uses an alternative consensus-based mechanism to extract work evidence, a system integrated with the largest market-cap crypto-currency, bitcoin. Called proof of participation, the alternative mechanism rewards users of the network for the conservation of its parts and thus contributes to the protection of the network.

The five percent estimated by Coinbase are based on the last 90 days of Tezo's return. The cabinet also notes that there is an initial holding period of 35 to 40 days, after which players will begin to see rewards appear in their accounts every three days.

The exchange also added Tezos to Coinbase Earn, a program aimed at informing the public about cryptography, and will distribute XTZ to participants who perform tasks.

Coinbase launches smooth staking for Tezos and Maker (Tokr), maker of chips of decentralized finance, in March on Coinbase Custody.

As Coinbase wrote at the time, Coinbase Custody is primarily aimed at institutional clients holding a large amount of cryptographic data. The latter initiative, however, concerns smaller farms in Tezos.

Image of Coinbase CEO Brian Armstrong via CoinDesk Archive

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