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Binance Launches Staking, Faces Sharp Criticism From Crypto Community

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In a recent update, leading exchange Binance announced support for staking. However, the initiative received flack from the crypto community and has also been accused of going against the spirit of decentralization. 

Are Users in For Maximum Benefits?

Binance CEO, Changpeng Zhao (CZ) recently via a tweet announced support for staking.  Some of the coins which can be staked on the platform include NEO (NEO/GAS), Ontology (ONT/ONG), Vechain (VEN/VTHO), Stellar (XLM), Komodo (KMD), Algorand (ALGO), Qtum (QTUM), & Stratis (STRAT). Staking is the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network.

Source- Twitter

The users will be able to earn stake rewards without having to become nodes. They simply need to keep a balance of crypto in their Binance account and get going!  Additionally, Binance will support, in conjunction with project teams, additional promotional rewards to incentivize users to stake on Binance. These rewards will be distributed on a case-by-case basis. Also, Binance will not be charging a fee on any staking operations. 

Is Binance’s Staking Program Against the Spirit of Decentralization?

His announcement garnered several responses from the crypto community. Dovey Wan, founding partner, Primitive Crypto considered it be a bad idea. Furthermore, she said that if funds are staked on the exchange it will not offer a value proposition for the users, as first, the exchange will eat up the funds. Secondly, they will be eaten by the custodial wallets. And, last but not the least, by PoW, whatever little will be left will be distributed to users staking their funds. 

Source- Twitter

Calvin Ayre, founder of Ayre Group and CoinGeek said that CZ is scamming. He further shared a tweet which said that the idea behind Bitcoin is to minimize the harmful effect of staking.  The tweet takes a dig at staking and said that it is simply not easy to make money doing nothing and the massive expansion on the Binance platform goes against decentralization and the original bitcoin whitepaper’s propositions.

Source- Twitter

Interestingly, crypto twitter seemed to agree with Dovey Wan and Calvin Ayre.

A crypto user with handle ” ChainLinkBull” said that everything will be gone if centralized, thus, resonating with Wan’s claims that users will be at the losing end.

Source- Twitter

Others users also expressed similar sentiments about Binance staking being against the principle of decentralization.

Source: Twitter

Binance Enables Deposits and Withdrawals for Interoperable Tokens

Today, Binance announced support for withdrawing and supporting interoperable tokens. The exchange has upgraded its deposit and withdrawal functions so that users can now more freely deposit and withdraw interoperable tokens to their preferred network via the web interface. 

Source- Twitter

The list of supported interoperable tokens include – 

USDT: ERC20, OMNI

PHB: NEP5, BEP2

ANKR: ERC20, BEP2

ARN: ERC20, BEP2

BCPT: ERC20, BEP2

CHZ: ERC20, BEP2

COS: ERC20, BEP2

DUSK: ERC20, BEP2

FTM: ERC20, BEP2

GTO: ERC20, BEP2

MITH: ERC20, BEP2

TOMO: TOMO, BEP2

It will be interesting to note how Binance reacts to all controversies around its massive expansion. Let us know, what you think!

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