Proof of Stake Alliance updates recommendations for staking providers

The Proof of Stake Alliance (POSA), a non-profit enactment that represents firms successful the crypto staking industry, published an updated mentation of its “staking principles” connected Nov. 9. The caller principles are supported by Ava Labs, Alluvial, Coinbase, Lido Protocol, Paradigm, and 10 different staking manufacture firms.

Previous mentation of the POSA staking principles. Source: POSA.

POSA represents 15 antithetic firms successful the staking industry, including Alluvial, Ava Labs, Blockdaemon, Coinbase, Credibly Neutral, Figment, Infstones, Kiln, Lido Protocol, Luganodes, Methodic, Obol, Polychain, Paradigm, and Staking Rewards.

The staking principles were archetypal published successful 2020. According to the blog station that announced them, the POSA staking principles are meant to beryllium “a acceptable of industry-driven solutions” that providers tin instrumentality to code the concerns of regulators and to promote liable practices successful the industry.

The aged mentation of the staking principles says staking providers should not springiness concern advice, warrant the magnitude of staking rewards that tin beryllium obtained, oregon connote that they person power implicit a protocol successful their selling materials. Instead, they should advertise that their products supply entree to a protocol and let users to heighten security. In addition, the principles authorities that staking providers should usage non-financial terminology specified arsenic “staking reward” successful their selling materials alternatively of fiscal presumption similar “interest.”

The Nov. 9 announcement says 3 caller principles volition beryllium added. First, staking providers volition beryllium encouraged to supply “Clear connection […] To guarantee users person each the accusation indispensable to marque informed decisions.” Second, users should beryllium capable to determine however overmuch of their assets they privation to stake, arsenic this volition beforehand “user ownership of staked assets." Third, staking providers should person “explicitly delineated responsibilities” and “should not negociate oregon power liquidity for users.”

The crypto staking manufacture has been criticized by immoderate regulators, who assertion it's a screen for issuing unregistered securities. Kraken’s staking work was shut down by the U.S. Securities and Exchange Commission on Feb. 9; the speech was ordered to wage $30 cardinal successful damages for allegedly violating securities laws. However, different staking providers person claimed that their staking services are not securities. For example, POSA subordinate Coinbase argued that its work is “fundamentally different” from Kraken’s and does not interruption securities laws.