The Indian crypto community now has the opportunity to earn passive income merely by holding cryptocurrencies – an activity known as staking.
- Mumbai-based cryptocurrency exchange CoinDCX launched its new product on Friday, allowing its users to stake three cryptocurrencies: harmony (ONE), qtum (QTUM) and tron (TRX).
- Users with a minimum balance of 100 ONE tokens, one QTUM token and five TRON tokens will be eligible for staking.
- An alternative to proof-of-work, or mining, proof-of-stake is a system used by some blockchains enabling users to hold coins in a cryptocurrency wallet to support the operations of the network in return for newly minted coins.
- In effect, staking is similar to buying government bonds in return for a fixed yield.
- CoinDCX said it will pool the holdings of multiple customers as a way to increase their chances of receiving rewards.
- “We want to make staking very simple for our users,” said Neeraj Khandelwal, co-founder of CoinDCX.
- The exchange will aggregate staking rewards via partner exchanges such as Binance, and also stake natively on blockchains, according to the announcement.
- CoinDCX is the first firm to launch a staking product within India, according to Khandelwal.
- Mumbai-based WazirX exchange's founder and CEO, Nischal Shetty, told CoinDesk in a Telegram chat his team is planning to launch a staking offering later this month for platforms like Tron and EOS.
Adoption driver?
- Sumit Gupta, CEO of CoinDCX, told CoinDesk the lure of making additional earnings via staking would be a big boost for the Indian market and could drive cryptocurrency adoption in the country.
- WazirX's Shetty agreed, saying, with interest on bank savings interest relatively low, Indian citizens are seeking other ways of earning passive income.
- The Reserve Bank of India (RBI) reduced the benchmark interest rate to a record low of 4% early this year.
- The annual returns from staking ONE, QTUM and TRX at CoinDCX are 8%–10%, 6%–10%, and 5%–10% respectively, the exchange said.
- Exchanges have witnessed a steady rise in trading volumes ever since the Supreme Court overruled the Reserve Bank of India’s ban on banking services for cryptocurrency firms in March.
Also read: Crypto Trading Volumes Rise in India After Banking Crisis, COVID-19 Lockdown