The Proof of Stake Alliance (POSA), a nonprofit group that represents companies within the crypto staking business, revealed an up to date model of its “staking principles” on Nov. 9.
POSA represents 15 totally different companies within the staking business, together with Alluvial, Ava Labs, Blockdaemon, Coinbase, Credibly Neutral, Figment, Infstones, Kiln, Lido Protocol, Luganodes, Methodic, Obol, Polychain, Paradigm, and Staking Rewards.
The staking ideas have been first published in 2020. According to the weblog publish that introduced them, they’re meant to be “a set of industry-driven solutions” that providers can implement to deal with the issues of regulators and encourage accountable practices within the business.
The outdated model of the ideas says staking providers shouldn’t give funding recommendation, assure the quantity of staking rewards that may be obtained, or suggest that they’ve management over a protocol of their advertising supplies. Instead, they need to promote that their merchandise present entry to a protocol and permit customers to boost safety. In addition, the ideas state that staking providers ought to use non-financial terminology reminiscent of “staking reward” of their advertising supplies as a substitute of monetary phrases like “interest.”
The Nov. 9 announcement says three new ideas can be added. First, staking providers can be inspired to offer “clear communication […] to ensure users have all the information necessary to make informed decisions.” Second, customers ought to have the ability to determine how a lot of their belongings they wish to stake, as it will promote “user ownership of staked assets.” Third, staking providers should have “explicitly delineated responsibilities” and “should not manage or control liquidity for users.”
The crypto staking business has been criticized by some regulators, who declare it’s a canopy for issuing unregistered securities. Kraken’s staking service was shut down by the United States Securities and Exchange Commission on Feb. 9, and the trade was ordered to pay $30 million in damages for allegedly violating securities legal guidelines. However, different staking providers have claimed that their providers will not be securities. For instance, POSA member Coinbase argued that its service is “fundamentally different” from Kraken’s and doesn’t violate securities legal guidelines.
