Sam McIngvale, Head of Product for Coinbase Custody, spoke about the new service provided by the platform, Staking and Governance, in an interview with Laura Shin for Unchained Podcast.
The interview began with Sam McIngvale speaking about the reasons behind Coinbase’s decision to offer staking service. McIngvale stated that all products and services offered on Coinbase custody were based on client demand, adding that buzz for staking started in Q4 of last year. He said,
“We started to hear this steady drumbeat specifically from our client, but also in the industry at large about large investors wanting to actively participate in the network they want to participate in”
He further stated that this “drumbeat” was usually for staking and governance, in particular. However, sometimes it was also about other mechanisms. McIngvale stated that this made sense from an institutional perspective as they have large stakes in these networks and want to support, adding that staking and voting was one of the ways this could be achieved. He went on to state,
“[…] we started hearing the drumbeat at large but it really crystallized for us when a large clients, at mid-Q4 said, ‘hey, we really enjoy the partnership we have with you all, we’re big fans of the platform but you are not getting this particular crypto unless you support staking’.”
McIngvale stated that this was when they “truly” began their research into it, looking at the possible measures they could take. During this process, the team learned about Tezos and Cosmos, resulting in them concluding that they could actually engage with these networks and also serve clients according to their needs by stake and earn staking rewards by keeping funds offline.
“[…] I guess the epiphany for us was that Delegated Proof of Stake networks work really well with our current offline custody architecture and that was what really went off and we knew that there was a lot of client demand […] and that’s when we sort of realized we had to start building.”
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