The company is determined to be the best provider of staking services, and considers it an “early winner.” Coinbase CEO Brian Armstrong stated that the company isn’t focused on making a profit despite the slump in cryptocurrency prices. It is focused on staking.
On Coinbase’s latest earnings call, he stated that the market could fluctuate between up and down in any given quarter. It’s important to know the difference between what we can control and what is out of our hands.
The crypto winter chill has dampened interest in trading digital assets by institutional and retail investors. Coinbase’s trading volume fell more than 50% compared to the previous quarter. It dropped to $217 billion, from $462 billion.
Alesia Haas, Coinbase’s CFO, admitted on the company call that investors tend to switch from traders to hodlers when faced with headwinds. However, she stated that the number of monthly transactions users has risen by 200,000 in the most recent quarter, compared to last year.
Coinbase’s shareholder letter stated that it keeps users around by giving them the opportunity to stake crypto.
The process of investing in crypto is called Staking . It involves lending it out to verify transactions on a network protocol. It allows validators to use proof-of-stake network protocols, as well as allowing them to secure the network and process transactions.
The letter states that the exchange views its staking product as an “early win” and is happy to help other companies. The letter also mentioned that staking is a priority product of Coinbase with the long-term goal to be the top staking provider for all companies involved in crypto.
Coinbase offers tokens such as Cosmos, Algorand and Cosmos as staking rewards. In March, it added Cardano and Solana to this list. Coinbase reported that 67% of its monthly users transacted with the company’s non-investing products in the second quarter.
Although it did not specify how many users were staking crypto specifically, the company stated that “Coinbase” saw a higher number of native units staked in Q2 than Q1.
As the Ethereum merge approaches, the company will continue to place an emphasis on staking in its business model. The second-largest cryptocurrency by market capital makes the long-awaited transition to a proof of work validation system for transactions to proof -of-stake.
The letter to shareholders states that “In August, we started offering Ethereum staking to institutional clients for the very first time.” “We will continue to add assets for staking both for our institutional and retail clients going forward.”