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Coinbase Custody is putting its funds, and not the customers’ funds ‘at risk,’ says Head of Product

Priya

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Coinbase Custody is putting its funds 'at risk', not the customers funds, says Head of Product
Source: Unsplash

Sam McIngvale, Head of Product for Coinbase Custody, explained how the staking service on Coinbase works, in an interview with Laura Shin for Unchained Podcast. He spoke on the topic and clarified that cold storage solution refers to storing cryptos offline, while staking refers to actively participating in the network.

McIngvale stated that on Coinbase Custody, the process of interacting with a Proof-of-Stake network was made as simple as depositing and withdrawing any other crypto asset. He further stated that when a Coinbase Custody customer deposits Tezos, the platform simultaneously delegates those coins into a cold storage address, to a baker Coinbase runs. He went on to state,

“Now, your point about how do you actively participate, there’s bonds [security deposit] for these networks. The way we’re are getting around that is Coinbase custody is actually purchasing the bond on behalf of our clients.”

This was followed by the executive stating that in reality, Coinbase Custody was the one that was putting its funds “at risk,” as the exchange was storing its funds in cold storage, instead of customers’ funds. He added that the customers’ Tezos were never at “any more risk,” than when participating in the network through Delegated Proof-of-Stake, which is equivalent to storing their Bitcoin and Ethereum in cold storage elsewhere.



Further, McIngvale stated that Coinbase was not only storing customers funds in cold storage wallets, but was also the validator the customers were delegating to. He said,

[…] Coinbase custody, in this case, is running the baker that is actually actively participating in the blockchain. So, baking blocks and endorsing other blocks and our coins funds in our cold storage are delegated to our baker.”

This enables Coinbase Custody to control a “couple of things,” he said. The platform can then control the bond for the baker, and a lot of infrastructure around it, making it highly secure and highly available, McIngvale added.

“[…] We can also control the payouts from it. So, as we earn baking rewards or staking rewards in future chains, we can just hit those out directly to our clients on chain. By this way, we get to own all of the infrastructure and sort of control everything there.”





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Altcoins

Binance Chain’s first project Mithril to launch with MITH/USDT trading pair

Namrata Shukla

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Binance Chain's adds Mithril as its first project followed by MITH/USDT trading pair
Source: Pixabay

Binance launched its blockchain protocol on April 18 and it already has its first project launch on its network. Mithril, a decentralized social media platform will migrate to Binance Chain. The company’s MITH token, that ranks 121st on CoinMarketCap will transfer from ERC20 to Binance’s BEP2 standard.

Binance Chain has been a highly anticipated project in the crypto world since its announcement and with its launch, the community provided ample support to the move. According to reports, Binance is luring companies into migrating to their new native chain and leave Ethereum.

According to Mithril’s blog post, the migration commenced after the mainnet launch of the Binance Chain and informed the MITH holders that the deposit and withdrawals on Binance.com will be halted for the initial 12-hour migration period, however, trading will continue. The post added:



“Once the initial migration of ERC20-based MITH to BEP2 MITH is complete, Binance users will be able to withdraw MITH to BEP2 wallets, such as the Ledger Nano S, and begin trading on Binance DEX. ERC20 versions of MITH held in private ETH wallets or on other exchanges will not be impacted.”

As Mithril announced about its migration to Binance chain, the price of MITH, Mithril’s native coin saw a surge. The coin also saw a 70% hike,  followed by a market correction. At press time, MITH was valued at $0.0782 with a market cap of $40 million. The 24-hour trading volume of the coin was $108 million as it pumped by 67.10% over the past day. In the past seven days, the coin noted a surge of a massive 81.47%, which started to dip by 0.84% over the past hour.

Following the addition of the project, Binance announced the listing of MITH/USDT trading pair, which will start trading on April 19, 10 AM UTC.





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