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Binance Research: Staking on the Rise Ahead of Ethereum’s Switch to PoS


Crypto staking is poised to be a major sector in the blockchain industry, with a maturing ecosystem and increasing support from major players like Ethereum and Binance, according to a new report from Binance Research.

Binance Research, the market research and analysis arm of Binance, has published a new comprehensive report that takes a deep dive into staking in the cryptocurrency industry. The report, titled The Rise of Staking: From Theory to Building Large Infrastructure, is an industry-first major study into staking

Currently, staking accounts for $8 billion in crypto activity, and $15.4 billion of all crypto tokens can be staked. Staking happens in many prominent crypto platforms, like Binance Staking, and is an increasingly popular activity. Binance Research estimates that the volume of staking activity will more than double once Ethereum, the second-biggest cryptocurrency in the world, introduces staking. 

“With Ethereum’s impending switch to Proof of Stake (PoS), staking is expected to take a most substantial portion of the market’s attention,” Binance Research stated. “As more infrastructure players support staking, the entire ecosystem will be able to mature.”

Read the full report here. 

One of the major infrastructure players, Binance, has supported staking programs of many of the cryptocurrencies it has listed on its exchange. The Binance Staking platform allows people to hold their tokens for trading on the exchange while also getting rewards for their tokens’ staking mechanisms.

Staking, the process of holding crypto tokens to support blockchains, has been one of the unique differentiating features offered in crypto-industry. It mimics passive-income strategies in traditional finance, allowing users to earn rewards directly on-chain for holding a given currency. 

In its report, Binance Research analyzed the diverse spectrum of crypto staking assets, as well as comprehensive information on what goes on in the process of staking. “Staking is available on many chains in many forms, but the precise mechanism depends on the staking project’s token design and consensus mechanism,” Binance Research stated. 

The report also notes that staking yields must be benchmarked against other chains based on potential risks and obligations like:

  1. Different chains pay out rewards with various restrictions and payout timings.

  2. Participants must address the technical risk of failure as well as their exposure risk to the underlying coin when deciding to stake long-term on a chain.

  3. Participating in different networks requires different resources and sometimes additional labor to collect rewards.

Read the full report here.